NAB confirmed yesterday that it will seek to sell the entirety of its MLC business by the end of calendar 2019, preferably via an IPO (although the bank is open to a trade sale).
However, NAB will retain its private banking business JBWere (which has roughly 140 advisers and 10,000 clients) as well as its SMSF-focused subsidiary nabtrade.
Speaking to InvestorDaily, NAB chief customer officer Andrew Hagger said the decision to offload MLC came after a nine-month review led by NAB chief operating officer Antony Cahill, MLC chief executive Matthew Lawrance and Hagger himself.
"The conclusion that we came to and recommended to [chief executive] Andrew Thorburn, who in turn recommended it to the board, was two sides of the same coin: on one side a deep desire to keep simplifying the bank ... and on the other a desire to keep investing in the wealth business," Mr Hagger said.
By floating MLC and creating an "ASX100" business, the wealth management business will be able to "make decisions around investments, to re-invest its earnings, and to raise capital," Mr Hagger said.
NAB will continue to invest in JBWere and nabtrade, he said – which service high-net-worth (HNW) individuals and SMSF clients, respectively.
The MLC business, once it is "independent" of NAB, will continue to receive referrals from NAB bankers, Mr Hagger said.
"What we are looking to do is for MLC advisers to continue to be able to be referred to by bankers for customers looking for financial advice outside [the HNW and SMSF segments]," he said.
"We've got to work through the details of how exactly that will work. But it remains important to NAB for customers to be served in banking and wealth," Mr Hagger said.
"Behind this model is to enable MLC to forge ahead with a more specialist focus and clearer investment agenda that will in turn help it serve MLC's own customer base but also the emerging [NAB] customer base," he said.
