Westpac’s Lindsay Maxsted says bank won’t sell BT Financial

The Australian 12:00am September 25, 2017

Scott Murdoch

Westpac chairman Lindsay Maxsted has indicated that Australia’s second-largest bank has no plans to follow its major rivals by offloading its wealth management.

The bank retains full ownership of BT Financial Management but it did earn about $600 million by selling down a large parcel this year of its shareholding in the separately listed BT Investment Management.

In an online editorial published by Westpac, Mr Maxsted said the bank was keen to keep investing in BT Financial and believed wealth management would remain a core asset for the bank for the foreseeable future.

“Similarly in wealth management — which some peers are ­exiting — choosing where to play and how to do it better, as we are doing within BT Financial Group, will be another differentiator. We have recently invested more than $500m in a new technology platform called Panorama at BT, clear evidence of the board’s belief that wealth management rightly sits inside a bank, and in Westpac,” he said. “In my eyes, BT is one of our shining lights well placed to help people with their superannuation, investing and banking needs in one place, a service many Australians want.”

Commonwealth Bank has flagged that Colonial First State Global Asset Management is ­effectively on the market and JPMorgan has been appointed to advise on future options for the large funds management division.

The bank is expected to give the go-ahead for CFSGAM to be effectively sold off through an ­initial public offering that could be made early next year.

ANZ is working through two indicative offers it has received for its wealth business that is for sale with a price tag of at least $4 billion. The sales process, which is being run by Goldman Sachs, has attracted bids from Zurich and MetLife but the bank has indicated it is in no rush to finalise a sale.

There was speculation at the weekend that the sale had started to drag and potential buyers were possibly starting to lose interest.

ANZ’s decision to group its wealth business together with its life insurance division has been questioned by some market ­observers.

NAB began the wealth sell-off in the sector when it offloaded 80 per cent of its MLC business to Nippon Life in October last year for $2.4bn.

In the opinion piece, Mr Maxsted said that while the banking industry was facing greater political and public scrutiny than ever before, he believed the sector was handling the pressure well.

He said the banks were operating in a competitive environment and the top four had to implement different strategies in order to build market share in their selected key industries.

“How we deal with the higher standards placed upon us will be one of the defining determinants of the banking leaders and laggards in the next decade.

“Observers say bank strategies are converging, focusing on core products and Australia. But we have always competed — intensely — in the same product patches.

“Whilst there will always be ­intense competition, I can see a time in the not too distant future where the leading bank, or banks, have rightly navigated the major forces of regulation, reputation and digital to become truly special operations, in contrast to the ­others which are not.”