According to Reuters, Australia’s fourth largest lender has already met with investment banks regarding a possible sale and may offload part or all of the division as part of a wider move to boost capital.
A source told the news agency that ANZ, which has an 8.5% share of Australia’s $62bn life insurance market, is still “streamlining” the pension product development unit before seeking out bids, although the bank could still decide to retain the operations.
The banking giant has had full control of its wealth management and life business since 2009, when it purchased a 51% stake from ING.
The news comes just months after ANZ split its global wealth management business into separate entities – with its Australia Wealth arm focusing on developing insurance and pension products while its retail division will concentrate on distribution.
If the sale goes ahead, ANZ will be the latest lender to exit Australia’s capital-intensive life insurance sector. Faced with increasing pressure to sell off non-core assets, banks must also demonstrate they have enough capital to offset soaring loans.
Last October, the country’s largest lender, National Australia Bank, agreed to sell an 80% stake in its life insurance arm to Japan’s Nippon Life Insurance, while Macquarie Group disposed of its life unit to Zurich Insurance Group earlier this year.
The Australian Bankers Association (ABA), which represents all the country’s major banks, is currently reviewing product sales commissions and product based payments.
The trade body’s probe, launched last month, comes amid mounting criticism by politicians and the media about poor customer service, particularly for investment advice and the sale of insurance products.