ANZ sells Asian wealth business

In a statement yesterday, ANZ announced it will be selling its retail and wealth businesses in Singapore, Hong Kong, China, Taiwan and Indonesia to Singapore’s DBS Bank.

ANZ will cop a net loss on the deal of $265 million including write-downs of software, goodwill and fixed assets, and separation and transaction costs, according to the statement.

The transaction comes after ANZ decided that further investments needed for its Asian retail and wealth branch network did “not make sense”, while investing in its Asian institutional banking business was a “far more attractive area where we can carve out winning positions”.

ANZ chief executive Shayne Elliott said, “Asia remains core to ANZ’s strategy. This transaction simplifies our business while allowing us to benefit from higher levels of growth in the region through a focus on our largest, most successful business in Asia - banking large corporate and institutional clients driven by trade and capital flows particularly with Australia and New Zealand.

“Having looked carefully at the business in recent months, it is clear the environment we face has changed and to make a real difference for our retail and wealth customers we would need to make further investments in our Asian branch network and digital capability.

“Further investments do not make sense for us given our competitive position and the returns available to ANZ.”

ANZ said the sale price represents an estimated premium to net tangible assets at completion of $110 million.

Most people currently employed in the bank's Asian retail and wealth business will join DBS Bank, ANZ said.

The transaction is subject to regulatory approvals in each market with completions anticipated over the next 18 months progressively from mid-2017.