ANZ NZ has reported a 4 per cent off drop in funds under management (FUM) during the six months to the end of March this year on the back of forced default KiwiSaver outflows, market volatility and the Bonus Bonds wind-up process.
In spite of the slight hit to FUM, the ANZ NZ investment business – the sole remaining funds management operation in the entire Australasian banking group – easily retained its ranking as the largest in the country with over $37 billion in the kitty.
According to an ANZ release: “Significant volatility in markets during the first six months of the year and the transfer of $513 million of KiwiSaver default customers in December to newly appointed default providers meant KiwiSaver funds under management dropped overall by $665 million from $19.1 billion to $18.5 billion.”
The ongoing wind-up of the long-running $3 billion ANZ Bonus Bonds scheme during the six-month period also lowered the FUM count. ANZ Investments managed the Bonus Bonds portfolio, which was mostly held in fixed income securities and cash.
ANZ accounts show the NZ funds division managed about $37.3 billion at the end of March this year compared to about $39 billion six months previously.
The bank also reported a $15 million revenue “decrease in the New Zealand division driven by the removal or reduction of funds under management fees”, the ANZ half-year report says.
ANZ cut the annual fixed dollar member payments on its KiwiSaver funds last year while also trimming investment management fees.
Over the six months to the end of March the ANZ NZ funds business racked up net income of $101 million against $116 million for the September 2021 half-year period.
The bank also introduced some fresh blood to the NZ investment team during the period, naming Fiona Mackenzie as head of funds management and Helen Skinner to the newly created head of responsible investments role.
Across the ditch, the Australian bank has completed its drawn-out exit from the wealth management game, booking a A$69 million loss after offloading its in-house financial planning business to Zurich Financial Services over the March half-year.
The bank sold its Australian investment, superannuation and third-party financial advisory businesses to the ASX-listed IOOF (now called Insignia Financial) in series of transactions dating back to 2018 and completed in 2020. Zurich also acquired the ANZ life insurance arm in 2019.
Along with the results announcement, ANZ chief, Shayne Elliott, revealed the bank was seeking to establish a new two-tiered structure for the organisation, separating out the core banking business from ancillary services offerings.
“Should the proposed restructure proceed, a new listed parent holding company will be created with two wholly owned distinct groups of entities sitting directly beneath it,” Elliott said in a release. “These would include the ‘Banking Group’ which would comprise the current Australia and New Zealand Banking Group Limited and the majority of its present-day subsidiaries and a ‘Non-Banking Group’, which would allow banking-adjacent businesses to be developed or acquired to help bring the best new technology and non-bank services to our customers.”
The corporate bifurcation would have no impact on the NZ business, according to an ANZ spokesperson.