AMP Says It Is Not Interested In Suncorp

Post by Sharat on July 9, 2009 · Under Australian Economy, Business News, Life Insurance, Mergers & Acquistions, Wealth Management, banking, insurance · Comment

Australian insurance and wealth management major AMP has said it is not interested in acquiring the insurance and wealth management assets of bancassurance group Suncorp Metway.

AMP’s chief executive Craig Dunn had previously indicated that the company would like to be actively involved in the consolidation of the Australian financial services sector. Mr. Dunn did however say there would be other opportunities and M&A as international companies with Australian operations, sell those units in order to better concentrate on key domestic markets.

Last month AMP lost out to National Australia Bank for the Australian life insurance and wealth management operations of global insurance major Aviva. NAB paid $925 million for those assets two weeks ago.

There has been much market speculation that Suncorp would split its business into two, either spinning off and selling its banking division, or doing the same with its insurance and wealth management business.

The AMP chief said it would be unlikely that AMP would be interested in Suncorp’s non bank financial assets, because the business was focused on life insurance.

Australia’s $1 trillion wealth management industry is likely to consolidate as major players look to increase their market share, at the expense perhaps of international rivals who decide to exit Australia and concentrate on key markets where leadership positions exist, in much the same way Aviva has done.

Australia’s Big Four banking groups have actively been seeking increased market share in the wealth management space over the last decade. Westpac acquired BT and Asgard, whilst rival CBA bought Colonial First State, NAB has scaled up with its purchase of Aviva’s Australian operation and ANZ has a strategic partnership with ING.

Mr. Dunn making his first public speech since assuming the top spot at AMP said,

“Consolidation is obviously something that is happening right now; we have started to see (it) in wealth management and that is partly because there are businesses for sale. In the bull market there was not a great incentive to sell but some people are in the position to do so, so you are seeing willing sellers. Because of some of the attractiveness in some of the opportunities we are also seeing willing buyers. We are going to see the two come together and we are going to see more transactions.”

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