NAB share price lifts amid Suncorp rumours

NAB shares are up amid acquisition rumours.
The post NAB share price lifts amid Suncorp rumours appeared first on The Motley Fool Australia. –

The National Australia Bank Ltd (ASX: NAB) share price is moving higher today amid news the big four ASX bank wants to buy the banking segment of Suncorp Group Ltd (ASX: SUN).

At the time of writing, NAB shares are trading up 0.69% at $30.74 apiece.

NAB is one of the largest banks alongside Australia and New Zealand Banking Group Ltd (ASX: ANZ), Commonwealth Bank of Australia (ASX: CBA), and Westpac Banking Corp (ASX: WBC). Both ANZ and Westpac are in the red today, while CBA is 0.58% higher.

NAB seems interested in making bolt-on acquisitions to increase the size of its consumer division. It recently bought the Australian consumer division of Citigroup. The purchase price is the net assets of the business, plus a premium of $250 million. At the time of the announcement, the required equity was approximately $1.2 billion.

NAB’s interest in Suncorp Bank

According to reporting by the Australian Financial Review, if Suncorp decides to put up its banking division for sale then NAB would be interested in trying to buy it.

The newspaper reported that NAB’s leadership has “informally” told Suncorp’s management about the interest.

The approach was reportedly so that Suncorp’s board would know there was a large potential bidder that would be serious if a sale process were to proceed.

It’s possible that a potentially enlarged NAB is a reason that investors are sending the NAB share price higher.

How much would this add to the big four bank?

In its quarterly update for the three months to 31 March 2022, Suncorp reported that its total housing loans were $48 billion (up 1.7% over the quarter). It also had $11.3 billion of business loans, up 0.8% for the quarter.

The Suncorp Bank impairment expense was $1 million for the quarter. Suncorp Bank CEO Clive van Horen said its lending portfolio continued to be “high-quality and conservatively positioned”.

It was also noted that turnaround times were “consistently competitive” over that quarter, reflecting “continued delivery of a targeted program of work to improve customer and broker experiences”.

Wouldn’t other banks be interested?

It’s possible that banks other than just NAB would be interested in acquiring the Suncorp Bank business.

The AFR suggested that each of the big four ASX banks of NAB, CBA, Westpac, and ANZ would be interested. However, for varying reasons, NAB may be the best-placed candidate.

The newspaper noted that CBA may be too large to buy the business due to competition reasons. Therefore, CBA could attract the attention of the Australian Competition and Consumer Commission (ACCC). Westpac’s “painful” restructuring could mean it isn’t in a position to make an acquisition. The AFR said that ANZ is “in the doldrums”.

However, the newspaper did point out that Macquarie Group Ltd (ASX: MQG) could be a bit of a wildcard – the Macquarie banking division is looking to grow its mortgage book.

What would happen to Suncorp?

For starters, the company would have a few billion dollars to decide to return to shareholders and/or invest into its remaining business.

The company would then still have its insurance operations with multiple brands including AAMI, Bingle, Apia, Terri Scheer, Vero, and Asteron Life.

NAB share price snapshot

The NAB share price is up almost 7% this year to date and 16% over the past 12 months. However, it is down 6.5% over the past month and 5% over the past week.

The post NAB share price lifts amid Suncorp rumours appeared first on The Motley Fool Australia.

Should you invest $1,000 in NAB right now?

Before you consider NAB, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and NAB wasn’t one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

More reading

Why GrainCorp, Link, NAB, and Pendal shares are sinking today
The NAB share price is in reverse today. Here’s why
What’s the outlook for ASX 200 bank shares amid rising interest rates?
Looking to secure the latest NAB dividend. Here’s what you need to do
Suncorp share price outperforms as home lending portfolio grows $800m

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited and Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US & HK* Trades. Click Here!