NAB’s Aviva Wealth Management Acquisition To Bring Scale

Post by NeilMc on June 29, 2009 · Under Australian Economy, Company News, Mergers & Acquistions, Wealth Management, banking, insurance · Comment

Australian banking major National Australia Bank (NAB) $825 million purchase of the Australian wealth management operations of Aviva PLC will provide scale to NAB’s life insurance business, says chief executive Cameron Clyne.

The acquisition of the insurance majors Australian insurance and wealth management unit marks the first major deal Mr. Clyne has embarked on since assuming the top job at NAB.

“With the Aviva transaction, we felt it was an appropriate sale acquisition for us. It brings scale to our existing business,” Mr Clyne told ABC Television’s Inside Business program.

Mr. Clyne said that after the completion of a strategic review, wealth management had been identified as a key area of growth, though banking would continue to remain its core business.

“The Aviva transaction was obviously an element of opportunism as it came up, and they don’t come up all the time and so we took that opportunity,” he said.

Mr. Clyne admitted that certain deals undertaken over the last twelve months had produced a sized differential amongst Australia’s big four banks.
“We still remain a large player in the Australian market but yes there has been a change in size,” he said.

“Size is not our driver. What we are focused on obviously is improving our total shareholder return. That’s been something of a disappointment for us over a number of years. Improving our return of equity, and importantly, improving the service we provide to our customers, and particularly helping them through this cycle. So, whether we’re one, two, three or four, I think as I’ve said on previous occasions, that’s not the primary concern.”

The NAB chief said that the UK business comprising of the Clydesdale and Yorkshire banks would have opportunity to grow in the future.

“The business there has attractive organic growth opportunities. There may be chances to strengthen its deposit franchises as the opportunities emerge perhaps from distressed building societies and other things,” Mr. Clyne said.

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