It was little more than a decade ago that ANZ harboured ambitions to become a “super-regional” financial powerhouse as it bought up banks across Asia.

That plan was abruptly abandoned six years ago when the 187-year-old bank admitted the expansion had not worked. It sold off the retail and wealth management operations it had fought hard to build in countries including Hong Kong, Singapore, Indonesia, Taiwan and China, where it owned a fifth of Shanghai Rural Commercial Bank.

It sought to refocus on its core Australian and New Zealand markets and institutional banking operations. The problem for the bank was that it fared little better in its home market despite a booming housing market.

ANZ is the smallest of Australia’s “Big Four” banks that dominate the domestic market — alongside Commonwealth Bank, Westpac and NAB — and its mortgage market share has dwindled in recent years as the bigger guys got bigger and upstarts in the residential market, Macquarie and AMP, began to bite.

Shayne Elliott, the chief executive who has led the bank since 2016, has moved to remedy the situation with a $3.3bn (A$4.9bn) takeover of financial group Suncorp’s banking arm. The move could be described as an old-fashioned regional play — versus the more exciting super-regional push into Asia of old — as it will transform the Melbourne-based bank into a significant player in the sunshine state of Queensland, which has been growing faster than other parts of Australia.

It is the biggest move to consolidate Australia’s lucrative banking market in the 14 years since the financial crisis and it is part of a broader global trend whereby powerful national banks give up on their international ambitions and focus instead on expanding in their home markets. Notable in-market deals have included Bank of Montreal buying Bank of the West from France’s BNP, Citizens buying HSBC’s American operations and a merger of M&T and People’s United Bank.

Citigroup is a case in point after it scrapped its global consumer banking division this year to boost its performance against key US rivals. The sell-off has seen it leave markets including Mexico and Australia, where NAB picked up Citi’s residential Aussie business for A$1.2bn in June.

In that context Elliott felt confident enough to call his Suncorp play a “once in a lifetime” opportunity for ANZ and represented the reward for the bank’s restructuring and international exits in recent years.

Critics were however quick to cry “same as it ever was” about the deal. ANZ may be absorbing a juicy A$47bn mortgage book by buying the Suncorp division, which will increase its market share to around 15 per cent, according to investment bank Jefferies. But that takes its share to roughly where it was four years ago — so the bank is effectively making up for lost ground and paying for the privilege.

Others noted that Elliott has just added a huge amount of cost and complexity into the business having spent years doing the opposite. Integration costs are estimated at A$680mn which seems high for a deal that won’t generate its full synergies for five years and ANZ has committed to running two banks for the foreseeable future as it won’t shut down branches or even replace the Suncorp brand.

Westpac unhelpfully rammed home that point when it unveiled a simplification plan to integrate its own regional banks — bought in 1997 and 2008 — to save costs only days after ANZ’s big deal was announced. That led some analysts to argue that ANZ was showing ill discipline with a big complex merger at a time when its core business was struggling to match up to its rivals.

The takeover also attracts other types of risk. The competition regulator in Australia has often complained that the Big Four — which control three-quarters of the home lending market — represent a “cosy oligopoly” in need of more competition. The collapse of Volt, one of the last of a crop of so-called “neo”, online-only banks this year has removed another potential thorn from the Big Four’s side. There is a real risk the once-in-a-lifetime deal could be blocked.

Yet investors may be assuaged that ANZ’s strategic angst hasn’t manifested itself in more radical form. A week before the Suncorp deal was made public, the bank said it had entered talks with private equity company KKR to buy accounting software company MYOB at a cost estimated by analysts at around A$4.5bn. That head-scratching deal to combine business lending with accounting technology left some wondering how much M&A discipline ANZ had learned from its international spree going awry. After the Suncorp deal was announced, the bank stepped back.

Author's email: nic.fildes@ft.com