ANZ Banking Group Ltd said yesterday it had agreed to sell pensions & investments & aligned dealer group businesses to IOOF Holdings Ltd, and continued to review options for its life insurance business.
The latest in a succession of sales to get the bank back to mainstream business is the sale of its OnePath pensions & investments & aligned dealer groups business for $A975 million. As part of the agreement, ANZ will also enter into a 20–year strategic alliance to make available IOOF superannuation & investment products to ANZ customers.
The OnePath pensions & investments business has $A48 billion of funds under management, and the aligned dealer groups business has 7172 aligned advisors & $A19.5 billion of funds managed.
OnePath life insurance has $A1.6 billion of premiums in force, OnePath general insurance $A226 million.
ANZ said the transaction price represented a multiple of 25 times the 2017 financial year net profit after tax, equating to 17 times after separation & transaction costs. Aggregate profit for the year was $A39 million.
The bank estimated its accounting loss on sale of about $A120 million, including sale proceeds of $A975 million, separation & transaction costs of about $A300 million post-tax, and an accounting adjustment of about $A500 million for Treasury shares.
ANZ expected the transaction to increase its tier 1 capital ratio (as set out by the Australian Prudential Regulation Authority) by about 15 basis points on completion.
The bank expects the transaction to take about 12 months to complete.
ANZ group executive for Wealth Australia, Alexis George, put the sale in this context: “The sale of the pensions & investments & aligned dealer groups businesses is consistent with ANZ’s strategy to create a simpler, better balanced bank focused on retail & business banking in Australia & New Zealand, and institutional banking supporting client trade & capital flows across the region. “Financial services such as superannuation, investments & advice are a core part of the support we provide ANZ customers now & in the future.
“By partnering with IOOF, we are able to create greater value for our shareholders while also providing our customers with access to quality wealth products from a specialist provider with the right cultural fit, financial strength & digital capability.
“The sale provides ANZ with greater flexibility to consider options for the life insurance business, including strategic & capital markets solutions.”
Attribution: Company release.