The Australian Competition and Consumer Commission has announced its preliminary findings into Westpac Banking Corp's proposed $16.3 billion merger with St George Bank.

The commission said the proposed merger was unlikely to raise competition concerns within the banking industry and that there were no competition concerns in the overlapping areas of retail banking, corporate and institutional banking, and insurance.

However, the commission said concerns about the impact of a Westpac and St George merger would have on BT and Asgard wrap platforms would be investigated.

The commission said St George, as Australia's fifth largest bank, was competitive on price, retail banking products and customers service against the major banks, but claims that St George was driving price and non-price competition in banking markets could not be sustained.

"We have not seen evidence to suggest that St George is a price leader in any of the relevant markets,'' the commission said.

"In terms of customer satisfaction levels, smaller banks and credit unions performed more strongly against St George.''

Westpac responded by saying the bank was confident that remaining concerns would be addressed satisfactorily and that brands and branches of both organisations would be retained under the proposed operating model.

The commission invited submissions on competition concerns by August 6 and that its final decision on the proposed merger had been deferred until August 20.

Westpac is Australia's third-largest retail bank, valued at $48 billion. Westpac shares rose by $1.44 to $22 yesterday. St George shares rose $1.80 to $28.75. St George shares are valued at $28.82 under the merger offer.

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