In a statement to the ASX yesterday following a brief trading halt, ANZ announced it had entered into an agreement to sell its Asia retail and wealth management businesses to Singaporean DBS Bank.
The sale price represents an estimated premium to net tangible assets at completion of approximately $110 million, said ANZ. The sale is expected to increase the bank's core equity tier 1 ratio by 15-20 basis points.
The retail and wealth businesses being sold include approximately $11 billion in gross lending assets, $7 billion in credit risk weighted assets and $17 billion in deposits.
ANZ chief executive Shayne Elliott said that while Asia remains "core" to ANZ's strategy, the sale of its retail businesses would allow it to focus on its more profitable institutional banking operations in Asia.
"By focusing our resources in Asia – whether that is capital, technology or people – on institutional banking, we can continue to build a world-class, capital efficient business by strengthening our network and the support we provide to our key institutional clients," Mr Elliott said.
"Having looked carefully at the business in recent months, it is clear the environment we face has changed and to make a real difference for our retail and wealth customers, we would need to make further investments in our Asian branch network and digital capability.
"Further investments do not make sense for us given our competitive position and the returns available to ANZ."
Read more:
Pace of US growth unlikely to continue
ASIC increases surveillance efforts
Rising bond yields putting pressure on stocks
Pimco to internalise responsible entity services
Alphinity adds three funds to mFund
