The shake-up at ANZ’s Australian wealth business that led to the exit of division chief, Joyce Phillips, last week would have little operational effect across the Tasman, according to John Body, the bank’s NZ head of wealth, retail and business banking.
However, Body, recently-promoted from head of wealth to his new broader role, said the departure of Phillips did establish cleaner reporting lines for the NZ division.
Following her exit, the New Zealand ANZ wealth unit no longer reports directly to Australia.
“We run wealth business in New Zealand for New Zealand customers,” he said. “I think it was recognised in the changes that Australia and New Zealand are different markets.”
Body said there were no changes in ANZ NZ top ranks in the latest round of executive disestablishments at the bank’s Australian headquarters. Australia media reports said Phillips would probably be the last high-level change for recently-appointed ANZ chief, Shayne Elliott.
However, an Australian Financial Review (AFR) story last week claimed Phillips’ axing marked the bank’s deep ambivalence towards its wealth management business.
The AFR report says Phillips had allegedly hired advisory firm Flagstaff Partners to help float off the ANZ wealth division.
However, ANZ “has ruled out a near term spin-off and listing of its life insurance and wealth business and will instead look to sell the unit in the medium term”, the AFR story says.
“While there is a strong view inside ANZ – and among some of its biggest shareholders – that the bank is not a natural owner of the wealth management businesses given the capital requirements, the bank wants time to prepare the unit for sale,” the AFR report says. “It was also determined that a sale would not have a big enough impact on ANZ’s capital position to make it worthwhile.”
Body declined to comment on whether the NZ wealth division would be part of any prospective sale.
He said the NZ ANZ wealth business – led by a dominant KiwiSaver arm, the country’s biggest funds manager, and a growing insurance book – had been a strong performer for the bank.
The bank’s three KiwiSaver schemes manage almost $8 billion, or over 26 per cent of the total market, while ANZ Investments boasts funds under management of about $22 billion.
ANZ corporate reshuffling last week coincided with a high-profile court action against the bank by the Australian Securities and Investments Commission (ASIC).
ASIC has set up a Federal Court battle with ANZ for in regard to alleged manipulation of Australia’s benchmark interest rate instruments.
In a release last week, ASIC says it launched the civil action for alleged “unconscionable conduct and market manipulation in relation to the ANZ’s involvement in setting the bank bill swap reference rate (BBSW) in the period March 2010 to May 2012”.
The corporate cop is seeking an admission from ANZ as well as “pecuniary penalties”.
“Prior to today’s action, ASIC’s investigations into misconduct in the BBSW has seen ASIC accept enforceable undertakings from UBS-AG, BNP Paribas and the Royal Bank of Scotland,” the ASIC release says. “The institutions also made voluntary contributions totalling $3.6 million to fund independent financial literacy projects in Australia.”