The chief executive of ANZ has revealed the bank’s frustration with the progress of its wealth division in the first half of 2012.
“I am somewhat frustrated by the traction that we have made in the wealth business,” Mike Smith told a media briefing yesterday.
“I feel that because we have got a disparate set of businesses that make up that wealth business in total, it has actually become somewhat fractured and difficult to manage.”
Smith said wealth management in the past couple of years had not been a “particularly clear tractive business”.
“I didn’t think it was going to move the dial and therefore the priorities were on other things. But now I think we do have to make sure we have got that one right for when the market turns,” he said.
“And I do think the market will turn at some stage.”
In the period ending 31 March 2012, ANZ’s wealth arm experienced a 9 per cent drop in net profit after tax from the previous period and 18 per cent year-on-year to $179 million.
The result was driven by higher operating expenses and a decline in trading volumes, ANZ said in its half-year report.
The wealth division includes OnePath and ANZ Private, as well as investments and insurance.
Increases in operating expenses were a result of investments in growth initiatives as well as higher funding costs and a decline in trading volume for Etrade, partially offset by higher net insurance income and net funds management income, ANZ said.
Funds management net income increased 5 per cent from the previous half-year period, driven by the realisation of project benefits arising from investment management and custodial arrangements, it said.
ANZ’s group net profit climbed 5 per cent to $2.92 billion from the previous half year and 6 per cent year-on-year.
