ANZ flaunts benefits of exiting advice space

In its full-year results released this week, ANZ acknowledged its exit from the financial planning and advice space has significantly contributed to the bank’s de-risking initiatives.

“We continued the systematic de-risking of the bank, highlighted by the sale of our margin lending business to Bendigo & Adelaide Bank, and just last month, we completed the formal separation of our wealth business to Insignia and Zurich,” said ANZ chief executive Shayne Elliott.

“Combined with the exit of financial planning and advice, as well as the associated remediation being at the very final stage, we are the only major bank in Australia to have removed the risks associated with wealth management for shareholders.”

During the March 2022 half, ANZ agreed to sell its financial planning and advice business servicing the affluent customer segment to Zurich.

“As a result of the transaction, the group recognised a $62 million loss largely comprising a goodwill write-off of $40 million in other operating income, restructuring expenses of $7 million, and an income tax benefit of $9 million in the Australia commercial division,” the bank said.

ANZ sold its aligned dealer groups business and OnePath pensions and investments business to Insignia, and its life insurance business to Zurich, across the 2019 and 2020 financial years.

In FY22, revenue in ANZ’s institutional business was up 2 per cent on the previous year and 10 per cent on the previous half, which ANZ said was driven by customer demand and disciplined margin management despite market revenue being adversely impacted by external shocks.

The Australian commercial business saw an 11 per cent lift in profit and a 10 per cent increase in revenue on the year prior with “good volume growth and disciplined margin management”.

A final dividend of 74 cents per share has been declared, which the ANZ board deemed appropriate and in line with its target dividend payout ratio of between 60 and 65 per cent.

On the outlook, Mr Elliot stated that the world is in a period of “significant uncertainty” as central banks struggle to control inflation amid persistent geopolitical uncertainty.

“There is uncertainty ahead; however, we have the business in good shape to withstand volatility,” Mr Elliot said.

“We also have a highly engaged workforce with a high-performance culture, and I’m confident in our ability to continue to deliver for customers and shareholders,” he said.

Jon Bragg

Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.