Its slim pickings for the Bank of Queensland and Suncorp, which appear to have no choice but to merge or suffer a competitive disadvantage to the big banks.
Sources indicated that the likelihood of a union between the two banks was made greater since the ACCC stated it would examine "very rigorously" further major bank acquisition of regional lenders.
A Business Daily source said the BoQ approached several local institutions in the last six months in an attempt to create a strategic tie, but the only option left open is Suncorp.
"David Liddy needs to improve the funding position of his bank and merging with Suncorp may represent an efficient way to do that."
According to the source, a merger would eliminate competition between the two institutions, while increasing the scale of their banking businesses and potentially improving their standing with international credit ratings agencies.
Lower ratings would allow the banks to pay lower fees to secure the wholesale funding guarantee from the Federal Government, in turn making them more competitive with the majors.
While Suncorp uses brokers, BoQ's relationship with the third party channel is limited to equipment finance products.
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