ANZ (NZ) grew its wealth division external revenue by over 13 per cent in the three months to December 2014, compared to the same period in the previous year.
In its unaudited December quarter results released last week, ANZ reported external revenue for the NZ wealth division (which includes funds management and insurance) of $34 million. Over the three months to December 31, 2013, ANZ wealth recorded external revenue of $30 million.
The wealth division also reported ‘intersegment revenues’ – essentially, interest charged to other ANZ units – of $42 million for the latest quarter.
Including the intersegment revenue, ANZ wealth turned in a profit after tax of $31 million in the December 2014 quarter compared to $26 million over the 2013 final three months.
ANZ declined to reveal the wealth revenue split between funds management and insurance over the quarter. However, in the year to September, 30, 2014, the bank reported funds management and insurance revenue of $139 million and $186 million respectively. Over the same period in the previous year, funds management revenue hit $124 million and insurance $110 million.
During the 12 months to September 30, 2014, the ANZ wealth external revenue of $211 million included a one-off insurance payment of $91 million relating to the bank’s exposure to the Diversified Yield Fund (DYF) and Regular Income Fund (RIF). After paying out more than $500 million to disgruntled DYF and RIF investors in 2009, ANZ (via its then-subsidiary ING NZ) took over ownership of 99 per cent of units in both funds.
When ANZ assumed control of the two funds, DYF and RYF were collectively valued at about $55 million, accounts show. ANZ sold down the underlying DYF/RIF assets in 2011 for roughly $255 million, suggesting – combined with the recent $91 million insurance payment – the bank recouped almost $350 million from its exposure to the products.
Earlier this month ASB reported a 16 per cent jump in funds management income over the year to end December 2014, largely on the back of its KiwiSaver fund, which is New Zealand’s biggest stand-alone scheme.
ASB invests solely in passive funds while ANZ typical favours an active approach to asset management.
However, ANZ is the country’s largest overall KiwiSaver provider, managing more than $5 billion on behalf of over 600,000 members spread across the bank’s three schemes. ANZ’s in-house NZ equities team and global asset management partners also have a number of wholesale clients.