ANZ Spins Off Another Business

Tom Burroughes

18 October 2017

, which late last year sold its Asian wealth management arm, yesterday said it was selling its OnePath pensions and investment business, and certain other aligned dealer groups, to IOOF Holdings for A$975 million ($762.9 million) in cash.

The banking group will enter a 20-year strategic alliance to make IOOF superannuation and investment products available to ANZ clients, it said in a statement.

Together, the P&I and ADG annual profit stands at A$39 million. Among the details, ANZ said there is an estimated accounting loss on sale of about A$120 million includes sale proceeds of A$975 million, separation and transaction costs of A$300 million after tax, and an accounting adjustment of around A$500 million for Treasury shares.

“We’ve been very clear that we want to offer wealth solutions to customers. That has not changed, we want to offer wealth solutions to our customers. But we’re not the best owner or the best manufacture of super and insurance. So that’s where we are going. The market place is clearly changing. We’ve seen lots of deals announced you see rumours about others coming into the space so I think it is going to be a different space but it doesn’t change our strategy,” ANZ Wealth Group Executive Alexis George said.

The sale is expected, ANZ said, to boost its APRA CET1 capital ratio – a measure of a bank’s capital “buffer” by about 15 basis points when the deal is complete.

There will be no material earnings per share and return on equity effects from the transaction, it said.

The transaction, it said, is expected to compete in 12 months, subject to approvals from regulators and completion of the OnePath P&I business from OnePath Life Insurance.

“The original intention was to look for a buyer of the whole business. I think as we’ve gone through this process it’s become clear that its actually better for the customers and for the shareholder that we separate the superannuation and insurance businesses and look for alternative outcomes for both of those. And today we announced IOOF; big player in super; big player in advice and it is the best outcome for our customers and shareholders in that space,” George said.