Aussie banks eyeing up wealth management opportunities

Two of the big four Australian are taking further steps in the wealth management space, with BNZ's parent, National Australia Bank, taking an 80% stake in Goldman Sachs JBWere, and ANZ reportedly looking at ING Group's private banking operations in Asia.

Thursday, July 30th 2009, 5:33AM

by Paul McBeth

The big four are "flush with cash" and looking for ways to expand into wealth management, and these are the probably the first steps of many, according to Paul Markham of Independent Investment Brokers.

"It's something I think we'll continue to see - the banks are cash rich and fund managers are really struggling," Markham said. "It's a great opportunity for the banks to expand into the wealth management business."

NAB will take an 80.1% stake in Goldman Sachs JBWere, which will be rebranded JBWere, with GSJBW retaining the remaining 19.9%. The new entity will be folded into MLC and NAB Wealth, NAB's wealth division, and will be able to tap certain products from its minority shareholder on an exclusive or preferred basis.

The bank will pay A$99 million, plus-performance related bonuses over the next three years, and "would have had to pay a lot more than that three years ago," Markham said.

JBWere has more than 22,000 clients, with assets under advice exceeding A$38 billion. It manages funds worth around A$10 billion. The takeover is subject to regulatory approvals, and is expected to be completed by the end of the year.

Meanwhile, a report by Australia's Daiwa Institute named ING's Asian private banking operations as a "compelling strategic fit" for ANZ, the parent of ANZ New Zealand and the National Bank, stoking speculation that the bank may half an eye on the Dutch insurer's Australasian businesses.

Paul is a staff writer for Good Returns based in Wellington.

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