National Australia Bank Limited (NAB) has completed the sale of its New Zealand wealth management businesses to newly established entity FirstCape Limited (FirstCape).
The creation of FirstCape brings together NAB’s JBWere New Zealand and BNZ Investment Services Limited businesses, together with Jarden Wealth and Harbour Asset Management to create a “leading advice and asset management business” for clients in New Zealand.
The big bank confirmed it will hold a 45 per cent stake in FirstCape, with Jarden holding a 20 per cent shareholding.
Moreover, funds managed by Pacific Equity Partners (PEP) additionally acquired a 35 per cent stake in FirstCape, with its investment used to fund the cash payments to NAB and Jarden.
The transaction is expected to result in a pre-tax gain of approximately $400 million before transaction costs, which will be excluded from NAB’s cash earnings.
NAB further revealed that this gain will be included in the group’s statutory net profit for the half year ending 30 September 2024.
“We’re pleased JBWere New Zealand will be part of a leading asset management and wealth advisory business. At the same time, we are committed to continuing to grow our JBWere business in Australia, which is a critical part of NAB’s integrated high-net-worth offering,” Michael Saadie, executive, NAB private wealth and CEO JBWere, said in December when the acquisition was first announced.
At the time, it was said that FirstCape would boast 113 advisers, NZ$29 billion of funds under advice and administration, and NZ$15 billion of funds under management, including NZ$5 billion of KiwiSaver funds under management.
The business is expected to cater to a broad spectrum of wealth journeys, encompassing individuals at various stages such as those saving for retirement, first-time home buyers, high-net-worth individuals, institutional clients, and not-for-profit organisations.
The CEO of JBWere New Zealand, Craig Patrick, said in December: “This is an exciting opportunity to grow the JBWere New Zealand advisory business and provide JBWere New Zealand advisers a wide range of advice tools to continue to offer a high-quality advice proposition to our clients.”
Late last year, NAB said it was carefully evaluating the Australian government’s proposal to usher banks back into advice with the creation of a new class of advisers – qualified advisers.
As previously reported by InvetorDaily’s sister brand, ifa, NAB has been the only big bank to directly address Michelle Levy’s Quality of Advice Review recommendation, which pushed for the banks to return, with Ross McEwan, the bank’s CEO, telling the House standing committee on economics in July that the change in legislation would have to be “dramatic” to “convince” the bank to “go back into that market”.
