Wealth business pays off for banks

A report by PwC into New Zealand’s banks’ Australian parents said they were simplifying, streamlining and rethinking their business architecture, by divesting their insurance, asset management, wealth and other associated businesses.

All the major banks have made, or signalled, such a move: Westpac’s chief executive in Australia blamed a “dramatic rise in compliance costs” forcing him to reconsider his commitment to a full-service wealth operation.

CBA, parent of ASB, revealed in June a demerger including its wealth management and mortgage broking businesses. NAB outlined plans to sell MLC and ANZ is selling much of its planning business to IOOF.

PwC said the banks had spent the past year revisiting some business fundamentals, including the economic returns available for investors and the personal remuneration that should be given to industry participants,