ANZ to Gain Full Ownership over ING Join Venture

Submitted by Jim Thesiger on 25 September, 2009 - 15:49

Banking and financial service provider Australia and News Zealand Bank ANZ (ANZ) is about to obtain the other half of its life insurance and wealth management join venture with ING which the bank is buying for $1.9 billion. The news spread after ANZ submitted a request for trading half and before a statement was released by the bank to the securities exchange. The underweight position of the bank is likely to assist it for receiving a warm welcome from the financial markets. ANZ will pay for the takeover from its internal capital which was lately bulked up by the bank. Tier one capital would fall 9.5 percent after the purchase. It is to be mentioned that the venture includes operations both in Australia and New Zealand.

ING Group made an announcement later regarding the deal saying ANZ is about to make a cash payment of $1.9 billion to obtain 51 percent stake in the join venture. The Dutch financial group would pump up a €300 million worth of net profit from the sale. ANZ said that the ING venture was in the third position for life insurance and was fifth in retail funds management in Australia. The ANZ chef executive Mike Smith stated that obtaining the full ownership of the life insurance and wealth management join ventures will take the bank to a stronger position in the wealth management industry. The bank managed to move forward with its plans successfully due to its strong balance sheet and took the advantage of the worldwide financial crisis, he added.

According to ANZ, the bank will see an increase in its earnings for the 2010 financial year even before considering the “significant” cost synergies. The insurance and wealth business which has about 2700 people employed was merged by ING and ANZ in the year 2002. The complete funds under management were $45 billion at the end of July.