Joyce Phillips, head of Australia & New Zealand Banking Group's wealth management business, is stepping down from the bank after a restructure of wealth business. Under the restructuring strategy, the bank will combine the wealth distribution arm in Australia and wealth management business in New Zealand and Asia with the retail sectors. A new division named Australia Wealth will manage the insurance, investment and pension products in Australia.
Shayne Elliott, chief executive officer of ANZ, has shuffled the senior executives' team in the bank since he expects to increase returns amid growing money requirements among Australian lenders. Last year, National Australia Bank, one of ANZ's peer in the country, sold 80% of the stock in its life insurance arm to Nippon Life Insurance.
T.S. Lim, a financial expert at Bell Potter Securities, said Bloomberg that this move by the bank signifies that its wealth distribution arm system matches its peers. He added that shifting of wealth arm into the retail sector will help the bank to preserve cash. Alexis George, managing director of the insurance sector, will lead the new Australia Wealth division. The current restructure strategy disassembles the modifications introduced in 2012.
Meanwhile, the bank has named Maile Carnegie, chief of Google Australia, as the group chief for digital banking. In this new position, Carnegie will be responsible for innovation, maintaining tactical relationships with the fintech division and digital projects. Elliot said that the wealth division performed well under Joyce Phillips. The wealth division reported a net income of $601 million in the year 2015, up 11% from the previous year. However, the wealth arm paid less than 10% to the bank's profit.
According to the sources, this restructure move in the bank's wealth division signals a possible sale in the following 12 months. In 2015, ANZ sold its Esanda dealer finance division for $8.2 billion to Macquarie Group, as reported by The Sydney Morning Herald.
According to FINANCIAL REVIEW, the wealth division accounted for nearly 10% of ANZ's capital with 40% in commercial and retail and 50% in Asia Pacifica and institutional. The move is welcomed by the bank's shareholders who expect an intense result from this shuffling. In 2009, the bank purchased 51% stake in wealth joint venture with the ING for $1.8 billion.
According to Elliot, this change in the wealth business system will reduce expenses and also boost the monetary efficiency of the bank. The shares of the bank increased 2.7% to A$23.69 in the Sydney stock exchange. The bank will appoint a new chief financial officer shortly.
The restructure of wealth management sector will aid the bank to reduce costs and improve returns and capital. Many experts believe that this move will enable the bank to maintain its position as Australia's fourth largest lender.
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