ANZ’s New Zealand wealth arm will be operating a “business as usual” policy despite its trans-Tasman counterpart facing a likely sale, according to a bank spokesperson.
“We will be looking at all possible options to ensure we maintain and strengthen our market leading position as New Zealand’s number one fund manager, KiwiSaver provider and third–largest insurance business,” the ANZ spokesperson said.
In a results announcement last week, ANZ confirmed it was considering “the possible sale of the life insurance, advice and superannuation and investments businesses in Australia” with a A$4.5 billion reported price tag.
“The wealth business in New Zealand will be considered separately during 2017,” the ANZ statement says.
ANZ chief, Shayne Elliott, instigated a review of the bank’s wealth business soon after his appointment this January, with Joyce Phillips, head of the-then Global Wealth division, one of the first to go in an executive cull.
Last week ANZ also sold its wealth management businesses in Singapore, Hong Kong, China, Taiwan and Indonesia to DBS Bank of Singapore for a premium above net assets of A$110 million.
The ANZ release says while the blue bank wanted to remain a distributor of “high quality wealth products and services” it no longer needed “to be a manufacturer of life and investment products”.
However, the ANZ Australian and NZ wealth businesses have followed vastly different evolutionary paths. Across the Tasman, the wealth business is a mish-mash of life insurance, super funds, investment platforms, multi-manager products and financial planning dealer groups.
In 2009 ANZ bought the remaining 51 per cent share of the ING Australian and NZ businesses after a seven-year joint venture. Following the 2009 deal, ANZ renamed the ING business, OnePath – albeit briefly in NZ (although the brand lives on in Australia).
Notably, unlike its Australian counterpart the NZ business retained an in-house funds management capability, which has flourished along with ANZ’s dominance in the KiwiSaver sector – currently accounting for about 26 per cent of the $35 billion plus market.
The latest accounts show the NZ funds business (including the almost A$3.4 billion bonus bonds arm) represents a third – or A$25.25 billion – of ANZ’s total funds under management (FUM).
Over the 12 months to September 30, ANZ NZ funds under management rose 16 per cent compared to a 9 per cent drop in the Australian FUM.
At the same time full-year operating expenses for the NZ funds arm stood at 0.36 per cent of FUM, compared to 0.53 per cent for the Australian business.
Nonetheless, it is understood ANZ is paring back expenses in the NZ wealth business as the formal review looms for next year.