ANZ gets cashed-up
Likely sell-off to fund big overhaul
ANZ chief Shayne Elliott appears likely to dramatically boost the war chest that will fund his overhaul of the bank as prospective buyers circle its insurance-focused wealth business.
New York-based insurance titan MetLife and Swiss heavyweight Zurich both made offers for the wealth unit ahead of an informal deadline last Friday.
At least one of the offers is well above $4 billion and at the top end of a valuation put on the division by analysts, it is believed. It comes as ANZ staff brace for a period of sweeping change at the lender, which, under Mr Elliott, is overhauling and simplifying its operations.
Under plans previously hatched by the group, the wealth unit’s products and services could still carry the ANZ brand if it were sold off, with Mr Elliott in April insisting the bank was not “getting out of wealth”.
The division includes insurance, superannuation, investment and advice businesses. Australia’s major banks have been selling assets and tapping investors for cash in recent years to bolster their books. It comes as regulators push them to set aside more money relative to the amount they lend out as a safeguard against any fallout from a new global financial crisis.
But ANZ does not need to sell the wealth business, industry experts say, having already raised its capital buffers.
In a research note published in July, banking analysts at investment bank Citi said ANZ was best placed among the four major banks to meet new balance-sheet standards due to take affect from the start of 2020.
The Commonwealth Bank and Westpac were respectively about $2.5 billion and $2 billion short of the amount they needed to hit the forthcoming capital ratio targets, they said.
If ANZ succeeds in selling the wealth business, that cash could help fund Mr Elliott’s transformation program.
Under his leadership, the bank is focusing on areas where it believes it has a competitive advantage, such as in institutional lending and digital banking.
Mr Elliott has invested heavily in digital operations, last year poaching Maile Carnegie – the former head of Google in Australia and New Zealand – to serve as group executive for digital banking.
In a statement to the Australian Securities Exchange yesterday, ANZ noted there was growing speculation that it would soon sell or spin off its wealth division.
“The process is ongoing and ANZ remains in discussion with a number of parties as it continues to work through its options,” the group said.
It acknowledged that the wealth unit could be floated or otherwise hived off.”
THE PROCESS IS ONGOING AND ANZ REMAINS IN DISCUSSION WITH A NUMBER OF PARTIES AS IT CONTINUES TO WORK THROUGH ITS OPTIONS