ANZ is a “few months” away from deciding on the fate of its wealth management business, according to a bank spokesperson,
despite rumours the Australian-headquartered institution was favouring a full exit from the troublesome unit.
Last week the Australian Financial Review (AFR) reported ANZ was understood to be favouring a “complete divestment of its wealth and life insurance operations”.
However, the ANZ NZ spokesperson dismissed the AFR report as “pure speculation”.
“Our CEO [Shayne Elliott] in Australia announced earlier this year that ANZ was undertaking a strategic review of our Wealth business,” the spokesperson said. “We expect the review to be completed in a few months. As the AFR article acknowledges, no firm decisions will be made before that review is completed.”
Elliott instigated the wealth review following his appointment as ANZ chief this January – his tenure starting with the customary executive clean-out including the axing of Joyce Phillips, previously head of the bank’s “global wealth” division.
In March, he told the bank’s in-house publication, BlueNotes, the shake-up in the ANZ wealth division was designed to “marry it with our retail businesses”.
“It’s really to looking ahead and saying ‘there are all these changes coming’, some about regulation and some about competition in the marketplace and we need to be ready for that,” Elliott told BlueNotes.
He said while ANZ’s wealth division had been a valuable enterprise it represented only 10 per cent of the bank’s capital.
“We want to really maximise and liberate that 10 per cent and do the best we can with it,” Elliott told BlueNotes.
“This is really just recognition that the world is changing ahead and we’re at a different stage of maturity and it’s kind of the time for the next stage in its evolution.”
As well as having to meeting tighter regulatory capital standards, ANZ, like all of Australia’s big banks, have been under pressure from the country’s financial regulator following a string of advice scandals.
In March, for example, ANZ agreed to conduct an independent review of its OnePath subsidiaries after the Australian Securities and Investments Commission (ASIC) found a number of breaches in the group’s “life, general insurance, superannuation and funds management activities”.
Other banks, including the Commonwealth Bank of Australia and Macquarie, have also copped significant regulatory actions over the last couple of years regarding their wealth units.
However, to date the New Zealand wealth divisions of the Australian banks have escaped similar regulatory actions.
In fact, ANZ NZ wealth division has been a unique profit centre for the Australian bank with, for example, its $20 billion plus in-house funds management division (the activity is outsourced in Australia) the largest in the country – backed by the biggest, and one of the fastest-growing – KiwiSaver units.