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ANZ Bank seeks potential buyers of NZ life insurance unit

Article – BusinessDesk

March 7 (BusinessDesk) – Australia & New Zealand Banking Group is gauging interest in its New Zealand life insurance division after the sale of its life unit across the Tasman shook out prospective buyers for the Kiwi business.ANZ Bank puts out feelers for potential buyers of NZ life insurance unit

By Paul McBeth

March 7 (BusinessDesk) – Australia & New Zealand Banking Group is gauging interest in its New Zealand life insurance division after the sale of its life unit across the Tasman shook out prospective buyers for the Kiwi business.

The lender sent an email to New Zealand staff yesterday saying it was engaging with a small number of parties to test their appetite for buying the business, spokesman Stefan Herrick said. ANZ’s sale of its Australian OnePath Life unit for A$2.85 billion to Zurich Financial Services Australia sparked interest in the New Zealand division, which the Australian Financial Review’s Street Talk column reported could attract a price tag of A$700 million to A$900 million.

“While we’re happy with how our business is performing and have plans for its development, we have decided to engage with a small number of parties to see what value they might add to the business,” Herrick said in an email. “This process might not result in a sale, but we owe it to the business and our customers to assess what will deliver the best performance for them.”

ANZ’s OnePath Life (NZ) division reported a profit of $32.3 million in the year ended Sept. 30, 2017, on revenue of $173.3 million. The insurer sold its medical business to nib Holdings for $24.7 million in the 2016 year.

Three of Australia’s ‘four pillars’ have sold their life insurance units as they contend with tighter prudential requirements, selling assets and raising capital to ensure they meet the regulator’s levels.

Still, ANZ’s Herrick said insurance remains a core part of its business, and that “will continue irrespective of any decision on who manufactures our life insurance products”.

ANZ had also planned to sell its New Zealand finance company, UDC Finance, although that deal was scuttled by the Overseas Investment Office when it couldn’t uncover the ultimate owners of the proposed buyer, HNA Group, and separately the lender sold its online trading platform Direct Capital to First NZ Capital.

The tyre-kicking comes the same week law firm Chapman Tripp released its annual mergers & acquisitions trends and insights report anticipated financial services would be one of the busier sectors for corporate takeover activity this year due in part to the Australian lenders scaling back the breadth of their services.

The dual-listed stock fell 1.3 percent to $30.30 on the NZX today, having declined 2.6 percent so far this year.

(BusinessDesk)

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