Australia and New Zealand Banking Group posted strong full year results in its wealth management businesses outside of Australia today, bolstered by the completion of the acquisition of Royal Bank of Scotland’s Asian wealth businesses.
Against the backdrop of a solid profit of $5.36 billion for the entire bank, ANZ Wealth in Asia, Europe and Americas saw revenues rise 18 per cent year on year. Expenditure was up 15 per cent year on year, with savings from the RBS transition being reinvested to grow revenue, according to the bank’s full year results.
The cost to income ratio for the business also improved, having declined from 81 per cent to 79 per cent during 2011.
The bank has been investing heavily in its Asia wealth business this year, and is aiming to derive up to 30 per cent of revenues from the Asia-Pacific region by 2017. The wealth management division invested $50 million this year, which included opening a Mumbai branch in June and a Chongqing branch in March.
New investment for IT and operations infrastructure focused on major programs such as Transactive Asia (cash management), the core banking system and global markets sale distribution platforms.
“The successful integration of the businesses acquired from RBS (in 2009) has supported the strong performance of retail and wealth. The repositioning of the businesses toward the affluent and emerging affluent segments is also now complete,” said the bank.
However, in the bank’s home market in Australia, by far its largest division, the results were not so good. ANZ Wealth’s post-tax profit in its Australian wealth management unit fell 16 per cent over the last twelve months.
ANZ Wealth Australia post-tax profit fell from $412 million in September 2010 to $345 million in September 2011.
A volatile market, negative investor sentiment and increased insurance costs caused by catastrophic weather events, were to blame for the fall. Strong new business growth was apparently offset by adverse general insurance claims around the Queensland floods, Hurricane Yasi and New Zealand earthquakes.
But despite the profit falls, Australia's fourth largest lender has announced plans for expanding the ANZ Wealth division in its home market.
"We are improving our Wealth proposition and enabling greater presence for the wealth management and insurance offerings within bank branches and online (eg, EasyProtect, 50+ Life)," said the firm.