M&A to increase post GFC: AXA

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Australian financial institutions are still under represented in emerging Asian markets, while merger and acquisition activity is set to increase globally, according to AXA Asia Pacific chief executive Andrew Penn.

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“It is very clear to me that Australian financial services companies have seriously under exploited the opportunity of the very exciting Asian markets that sit on our doorstep,” Penn said in a speech to the Financial Services Institute of Australasia’s (Finsia’s) Asia Financial Services Summit 2010.

“Other than two companies, the major Australian financial institutions have no material presence in the region.”

In those markets AXA competes with major US and European companies, but not Australian companies because they are simply not there, he said.

This is partly due to the many barriers to entry, with many Asian markets not issuing new licences, and a lot of work is needed establishing relationships to be successful in the region, he said.

Australia’s professional, robust and growing financial services industry, with its available skilled resources, means it is ideally placed to take advantage of its position and become a regional financial services hub, he said.

On the merger and acquisitions side, Penn said the post global financial crisis shift had already begun, with many companies looking to restructure and repair their balance sheets.

Upcoming changes in regulations around advice, superannuation and tax would also lead to increased merger and acquisitions activity, while companies that were shifting their focus from survival to growth would also be involved in increased merger and acquisitions activity, he said.

Penn downplayed the controversy around a potential sale of AXA’s wealth.net platform in the event of a NAB takeover, instead spruiking the product’s advantages in a fee-for-service environment.

“With our wealth.net platform we are well positioned to respond to the anticipated changes from the Cooper Review and our innovative North product range was expanded this quarter with a post retirement option,” he said.