The National Australia Bank Ltd (ASX: NAB) share price is pushing higher on Tuesday morning.
At the time of writing, the banking giant’s shares are up 0.5% to $26.31.
Why is the NAB share price pushing higher?
As well as climbing higher with the rest of the market, the NAB share price was given a lift by a positive announcement relating to an acquisition.
According to the release, the Australian Competition and Consumer Commission (ACCC) will not oppose the bank’s proposed acquisition of digital bank, 86 400.
This follows NAB’s approach in January to acquire the neobank for approximately $220 million. At that point, the banking giant already owned an 18.3% stake in the 86 400.
What did the ACCC say?
“Innovative fintechs play an increasingly critical role in the market, challenging the established banks, leading to more innovative and cheaper banking for consumers. We therefore examined the proposed acquisition particularly closely, including extensive consultation with industry participants, given the important role of that innovation.” ACCC Chair Rod Sims said.
Mr Sims advised that the regulator’s consultation included banks, non-bank lenders, fintechs, mortgage brokers, industry and consumer bodies. However, most interested parties raised no or limited concerns with the transaction.
Mr Sims explained: “Market feedback suggested that while 86 400 is innovative, particularly in reducing the time and effort in completing home loan applications, there are a number of other businesses with similar offerings or the ability to replicate them. These other competitors continue to bring a similar disruptive influence to the market.”
In addition to this, the ACCC notes that other banks and non-bank lenders have been investing heavily in their technology and service offering to improve user experience.
ACCC will keep watch
Mr Sims revealed that the ACCC will be keeping a close eye on the sector.
He said: “Whilst in this instance we found that the removal of 86 400 is unlikely to substantially lessen competition in the market, we will continue to closely scrutinise proposed acquisitions of emerging competitors, particularly by major banks.”
“The ACCC’s home loan price inquiry reports of 2018 and 2020 show competition between the big four banks has been muted at best. They tend to accommodate each other rather than competing strongly to win market share. Therefore any acquisition of a rival or potential rival by any of the big four needs to be very closely considered,” he concluded.
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