National Australia Bank is joining its industry peers and decided to move away from wealth management to focus on core banking services.
National Australia Bank (NAB) said it will sell off its $3 billion MLC subsidiary by the end of 2019. For the time being the Melbourne-based bank will continue to service high-net-worth clients through its private wealth and stockbroking group JBWere, the bank said in its report for the half year which ended March 31.
The decision NAB mirrors that of the other big four Australian banks, which also reduced their wealth management or even exited the business completely. Asian banks have been keen acquirers.
A Simpler Bank
Speaking to the media about NAB's half-year results, Chief Executive Andrew Thorburn said that owning a financial advice and asset management business risked to expose the bank to excessive complexity.
His words echoed those of ANZ Chief Shayne Elliott who exited wealth and insurance markets as part of his long-term plan to simplify his bank.
Getting Out
In May 2017, Singapore's OCBC bought NAB's private wealth business in Singapore and Hong Kong. The Commonwealth Bank of Australia recently sold its CommInsure and Sovereign to AIA, a move that reinforced AIA's position as one of the biggest life insurers in the Asia-Pacific region.
In a deal worth A$2.85 billion ($2.14 billion), Swiss insurer Zurich snapped up ANZ’s Australian life insurance business. That deal followed ANZ's exit from Asian wealth management after it sold its operations in Singapore, Hong Kong, China, Taiwan and Indonesia to Singapore's largest lender DBS in 2016.
