In NAB’s half year results, published on Thursday, the bank said the changes to its wealth management strategy are “consistent with our plan to become simpler, faster and focused on core banking”.
A details review, conducted over nine months, “determined we could best serve the needs of our customers […] by retaining and investing in a more focused wealth offering”.
The aim is that the businesses, currently operating under MLC and other brands, will be separated by the end of 2019 via public markets options; including a demerger and IPO.
NAB acquired MLC in 2000 for A$4.5bn (£2.5bn, $3.8bn, €2.8bn).
“It is expected there will be ongoing arrangements between NAB and MLC, to offer NAB customers continued access to advice and products,” the bank said.
Royal Commission
Australia’s advice market looks set for significant upheaval after a bruising Royal Commission, which saw financial institutions raked over the coals for their treatment of customers.
The major public inquiry recently spent two weeks focusing solely on the advice market, with damning revelations coming to light.
As of February 2018, Australia’s five largest banking and financial institutions have collectively paid A$51.4m to customers who suffered losses because of “non-compliant conduct” by financial advisers.
M&A activity has been rife in the sector for years, with NAB selling 80% of its life insurance business to Japan’s Nippon Life in October 2016.
But as banks try to recover from some of the jaw-dropping moments uncovered in recent weeks, exiting the advice and wealth management space could look increasingly appealing.
