We all knew it was coming.

The buy-out of St George bank has been imminent since it acquired its banking license and listed on the ASX back in 1992. That's a long time coming by anyone's measure, and certainly Westpac is far from the first suitor. NAB and the ANZ have sauntered past previously but the timing wasn't right, and let's face it, what's really going to make this deal work is golden girl Gail Kelly.

But that's precisely what has me worried. With Kelly in the wings, this deal is not only likely to work, it's likely to be smoother than the vast majority of banking takeovers, not only because she brought into Westpac an intimate understanding of her former employer, but also because she's just so damn good at making one plus one add up to three.

See, while pundits were predicting its take over by others, St George spent the last decade and a half growing through acquisition. It picked up the seeds of its commercial banking division through the acquisition of Barclay's, its personal savings and investment products through the buy out of Sealcorp, its SME business services through the purchase Scottish Pacific Business Finance Group, and its margin lending services by picking up a bit of Deutsche Bank. OK, maybe in the current climate that last one no longer looks so sexy, but like so many decisions, it seemed like a really good idea at the time.

Anyhow, this period of voracity was topped off by Kelly's sudden appointment to the role of CEO, which in turn lead to a period of consolidation of all these bits and pieces, and ultimately an unprecedented growth in share price, customer satisfaction, employee kudos - you name it, she managed to pull it off.

And it's this track record that makes me, and just about everyone else, suspect that she'll make this long forecast buyout of St George work for Westpac.

The big four will finally be the big four, rather than the big four and a half. The smaller banks, who used at the very least to have St George to aspire to, will start to look a lot smaller, and the leap into the big game a lot harder to achieve.

Now, it has to be said before I go any further, that I am a customer of both banks, and a shareholder of neither, so while I believe the potential merger would be an outrageous success, I'm actually hoping it doesn't go ahead.

And while my hopes are almost entirely inspired by personal interest, I'll back it up with a broader utilitarian argument ie: while shareholders stand to gain, customers, employees and the general public stand to loose. If we're following the whole "most benefit to most people", line the combined benefits to shareholders are unlikely to come anywhere near outstripping the losses to the rest of us.

Yeah - I'm afraid it doesn't add up.

At this stage Westpac brings about 330 000 shareholders into the deal, while St George accounts for a tad over 170 000.  It's a bit too simplistic to combine the figures because they'll be a lot of cross over, and a lot double counting, but let's be conservative and say a combined shareholder base of a bit over 450 000, who stand to gain.

And while this number easily dwarfs the combined workforce of 36 000 staff, there's just no way it will go anywhere near the combined customer base of roughly 10 million, who stand to loose.

The 10 million is a figure the banks have nutted out themselves, so I'm not sure how they've accounted for cross over, but neither bank has been able to present a case of customer benefit from a combined St Westpac outfit.

As our newbie treasurer and the ACCC's Mr Samuels should be vigorously pointing out, those ten million, at some stage in the process will find themselves banking from a single merged entity, which will in turn need to review and cut back on the range of services it provides in order to reap the full benefit from the new arrangement.

There will have to be reduced services, there will have to be job cuts, and there will have to be branch closures or it just won't benefit shareholders.

That is to say current customers of both banks stand to loose out on the range of services they currently enjoy. Then there's the other ten million Australians who don't bank with one or ‘tuther, but benefit on some level from having had the chance to choose between four and a half big, rather than just four.

Herein lies that fundamental contradiction at the heart of capitalism, the only way to ensure consumer choice is to regulate the irresistible market push towards consolidation. Whenever free markets are left alone to do what they want to do, customers and economies suffer from a reduction in competition, diversity and choice.

So although it will leave both banks slightly bruised, and financial markets baying for blood, I for one am hoping the ACCC and Federal Government knocks the whole deal on the head before it gains too much momentum.

I like my banks just the way they are; separate and competitive.

Happy banking!