The sale of Axa Asia Pacific's (Axa AP) North Wealth.net platform is fraught with difficulties, analysts have said.
The Australian Competition and Consumer Commission's (ACCC) decision to block a merger of Axa AP and National Australia Bank (NAB) was partly based on the innovativeness and potential of Axa AP's platforms.
But the problem is that the underlying technology on which North is built is not owned by Axa AP, but is the property of a division of DST Global Solutions called Bluedoor Technologies.
"The problem with Axa North is that the IT is owned by Bluedoor," Credit Suisse diversified financials analyst Arjan van Veen said.
"If you are not the owner then why would anyone buy it? They can go directly to Bluedoor," he said.
Axa AP also has the problem of migrating its advisers to another platform if a sale were to occur.
Since North has been in use, Axa AP has put many new advisers on the system and these would have to transfer to one of NAB's other platforms, such as Navigator.
"From an adviser point of view that is not the best solution, and that's why people often talk about a sell-and-lease back [arrangement]," van Veen said.
"But if they get it back anyway, then from a competition point of view it makes no difference," he said.
North is also relatively small compared to Axa AP's overall operations.
Only about $1.5 billion of Axa AP's $25 billion of assets under management are on North and a divestment might not be enough to appease the regulator.
"There is no guarantee it will address the ACCC's concerns," CMC Markets analyst David Taylor said. "It is a difficult environment for NAB - they've got their hands tied behind their backs."
After much speculation in the market, NAB admitted last Friday it was exploring the potential of brokering a sale of the North Wealth.net platform.
"NAB is considering the possible divestment of the North Wealth.net investment platform business of Axa AP. NAB is in preliminary discussions with Axa AP, the ACCC and other interested third parties in that regard," the bank said.
NAB continued to say it had no assurance that such a possible divestment would indeed occur or that it would address the concerns raised by the ACCC.
A spokesperson for the bank said the statement was not made on the back of any new developments.
"We just wanted to make sure we provided proper disclosure," the spokesperson said.
