ANZ Bank take control of ING in Australasia, lifting KiwiSaver dominance

Friday 25th September 2009

Australia & New Zealand Banking Group mopped up the remaining 51% of ING Australia and ING NZ for A$1.76 billion in a deal that cements its dominance as a KiwiSaver provider and lifts its wealth management assets to a scale to compete with rivals.

The acquisition gives New Zealand’s largest bank control of its wealth management business as it subsumes ING’s funds management and life insurance businesses and its listed-property trusts in New Zealand.

It is initially acquiring a brand that’s been forced to weather the fall-out from two failed CDO-related funds. The ownership change may herald a shift in culture for ING, which has the sort of deep relationships with investment advisers that banks haven’t developed.

“People are falling over to congratulate ANZ for the acquisition, but it’s more a case of ING leaving this neck of the woods,” said Murray Weatherston, head of the Society of Independent Financial Advisers. “It’s going to be very interesting to see how ANZ takes on a distribution channel it’s never had before.”

ANZ’s wealth management businesses have lagged behind the other major Australian banks, and the deal is seen as a logical step forward in its seven-year relationship with ING.

Commonwealth Bank owns Colonial First State while National Australia Bank has MLC and Westpac Group owns BT Funds Management. In July, NAB acquired an 80% stake in Goldman Sachs JBWere, which includes its wealth management assets “ANZ had an incomplete position in the wealth management market and an incomplete strategy,” said Angus Gluskie, who manages about A$360 million at White Funds Management in Sydney. “I’d expect ANZ will probably look at how to solidify its position in wealth management, which has been an area where they’ve lagged behind the others.”

ANZ will retain the ING brand for up to 12 months, and chief executive Mike Smith told a media briefing he would like to move “as fast as we can to rebrand.”

The acquisition will boost managed funds at ANZ Bank’s New Zealand business, ANZ National Bank, to $12 billion from its existing $5 billion.

As part of the arrangement, ANZ agreed to buy ING Groep’s interests in the frozen diversified yield and regular income funds for A$55 million.

Smith said the damage to the brand from the failure of the funds didn’t reduce the price paid for the kiwi business. ANZ acting chief executive for Australia Graham Hodges told the media conference that the offer extended to ANZ customers who win redress through the Banking Ombudsman in the frozen CDO funds wouldn’t be expanded to include ING customers.

In taking over ING, the bank will become the largest overall KiwiSaver provider with some $523 million under management. Commonwealth Bank of Australia’s ASB is the single-biggest provider with $447 million under management.

Helen Troup will stay on as chief executive of ING NZ. Dutch company ING Groep NV will make a profit of some 300 million euros from the sale, as it seeks to raise some 8 billion euros to repay government loans it received last year.

ING’s other Australian businesses, ING Direct, ING Investment Management, ING Wholesale Banking and ING Real Estate won’t be affected by the sale.

Businesswire.co.nz

Comments from our readers

No comments yet