ACB News "Australia Finance Online" October 5th, October 2, 2018, Australian wealth management group IOOF (ASX: IFL) announced the completion of the ANZ Bank (ASX: ANZ) wealth management company Aligned Dealer Groups (ADGs) ), and updated the transaction dynamics of the acquisition of One Path Pensions and Investments (ANZ P&I) business of ANZ Bank.
According to the transaction announcement, from October 1, 2018, the business ownership of ANZ Bank’s ADGs will be transferred to IOOF with immediate effect.
The announcement also reminded that on October 2, 2018, IOOF's "funding" acquisition of ANZ Bank's P&I business also officially started. On the same day, IOOF paid A$800 million in advance to ANZ Bank to subscribe for the loan bonds it issued. From October 2, 2018 to the date of bond redemption, ANZ Bank will pay interest to IOOF at a coupon rate of 14.4%, which amounts to approximately 82% of the economic income of ANZ Bank’s P&I business.
To complete the final acquisition of ANZ Bank’s P&I business, IOOF also needs to complete a subsequent transfer of funds (used to spin off the P&I business from ANZ Bank’s OnePath Life business), which is expected to be in March 2019 At the end of the month.
IOOF reiterated that if the financial situation is running well, the early completion of the ADGs acquisition and the completion of the "funding transaction" for the P&I acquisition means that the growth of IOOF's earnings per share can continue to be determined according to the forecast in the initial transaction announcement.
Both of these acquisitions started in October 2017. In that month, ANZ announced the divestiture of ADGs and P&I businesses and sold them to IOOF.
This move by ANZ Bank was carried out in the context of heavy pressure from Australian banks.
When traditional business models cannot avoid conflicts of interest between various departments, regulatory authorities are increasingly demanding bank capital liquidity, and financial technology platforms are eroding the market step by step. Australia’s major banks have to reposition their businesses and simplify business models. .
In this situation, in the past two years, Australian banking giants have begun to divest assets with poor profit levels, such as pension business and life insurance business, in an attempt to embark on new business forms.
After the ANZ Bank divested part of its wealth management business and pension business this time, it will reorganize and streamline its banking business and internal organizational structure. ANZ Bank plans to integrate internal staff into hundreds of "small teams" in order to reduce overall operating costs and at the same time facilitate bank management to become more digital.
Tags: IOOF acquires ANZ business wealth management IFL ANZ Bank
