ANZ may need to purchase the remaining stake of ING Australia it does not currently own in order to better compete with its domestic banking rivals in the wealth management market, a number of investment experts have said.
“ANZ is in quite a structurally weak position in wealth management and that’s one of the reasons we don’t own their shares,” Platypus Asset Management portfolio manager Prasad Patkar said.
ING Australia is a joint venture 51 per cent owned by Netherlands-based ING Group and 49 per cent owned by ANZ.
Owning all of ING Australia would be an appropriate first step and gives ANZ the ability, control and flexibility to drive that business harder, Patkar said.
Still, even that purchase would not be enough to make ANZ a serious player within wealth management.
“I’m not suggesting that they would do this, but they would have to buy something like AMP to potentially catch up with the rest of the pack,” Patkar said.
“But it’s a big, big price tag. AMP’s market cap is $10.5 billion and with a takeover premium on top you’re looking at $13-14 billion which is very, very chunky.”
Tyndall Investment Management said ANZ would be the natural buyer for the remaining part of ING Australia, but there was no pressing need for ANZ to beef up its wealth management.
“What we would like to see is for any acquisition to be done at a good price, to provide synergies and to be strategically beneficial in the long term,” Tyndall senior research analyst Craig Young said.
An ANZ spokesperson said the bank did not comment on market speculation.
“ANZ has a shareholder agreement with ING Australia which extends until 2012. The joint venture is performing well,” the spokesperson said.
While ING Australia did not comment on market speculation, both ING and ANZ had always been committed to the continuation of the joint venture and were regularly exploring ways to expand and grow the business, an ING Australia spokesperson said.
