Retail life claims hampers ANZ Wealth
ANZ’s Wealth Australia has reported a decrease in net funds management and insurance income as a result of adverse retail life claims experience.
The 2017 Annual Review showed a decrease of $163 million due to adverse retail life claims experience, and a one-off experience loss due to the exit of a group life insurance plan. This was partially offset by reinsurance profit share and favourable claims experience in Lenders Mortgage Insurance.
Funds management income decreased as a result of the strategy to rationalise the legacy portfolio to SmartChoice, which the bank said was a lower risk model. This was now complete.
“Operating expenses decreased due to productivity initiatives that resulted in a reduction in FTE (full-time equivalent), partially offset by inflation and higher regulatory compliance and remediation spend,” the review said.
This led to an $86 million decrease in cash profit from prior year, a reduction of 27 per cent.
The bank reduced full-time equivalent staff by four per cent, including a six per cent reduction in senior management as a result of a reshaping of the organisation.
There were now 44,896 full-time equivalent employees, down from 46,554 in 2016.
The bank’s statutory profit was $6.4 billion, up 12 per cent, while cash profit (which excludes non-core items from statutory profit), was $6.9 billion, up 18 per cent.
The final dividend of 80 cents per share brought the total to 160 cents per share fully franked for the year, unchanged from 2016.
“This reflects a dividend payout ratio of 68 per cent of cash profit with $4.6 billion in dividends paid to shareholders, moving ANZ closer to our target fully franked payout ratio of 60-65 per cent of cash profit,” the review said.
AUTHOR
Malavika Santhebennur
Recommended for you
Grant Hackett has been promoted from CEO of Generation Life to head up the wider Generation Development Group.
Tribeca Investment Partners has made a distribution hire from Australian Ethical in a newly-created role focused on the national intermediary market.
Asset managers may be urged to diversify their product ranges, but investment executives have warned any M&A deal should avoid simply filling gaps and instead consider long-term value creation.
Specialist wealth platform provider Mason Stevens has become the latest target of an acquisition as it enters a binding agreement with a leading Sydney-based private equity firm.
