Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
subscribe to our newsletter

Capital focus to drive bank divestment in 2016

The preoccupation of the big banks with their capital costs is likely to see increased divestment activity in 2016, predicts Herbert Smith Freehills.

In their predictions for 2016, Herbert Smith Freehills M&A partners Tony Damian and Rodd Levy said the "sectors to watch" in 2016 will be resources and financial services.

"In resources, we see a continuation of consolidation driven by cost concerns, as well as divestments driven by deleveraging concerns of major players, as driving M&A activity," said Mr Damian and Mr Levy.

Advertisement
Advertisement

"In financial services, the relentless consideration by banks of the capital costs of certain of their operations is likely to see divestment activity, coupled with some of the smaller and foreign players being in a position to take advantage of those divestments."

The current year has already seen a number of divestments by the big banks, with NAB announcing on 28 October 2015 that it had agreed to sell 80 per cent of its life insurance business to Japanese life insurer Nippon Life.

NAB has also targeted the end of calendar 2015 to complete the IPO and demerger of its UK-based banking arm, Clydesdale Bank.

Westpac announced on 16 June 2015 that it was reducing its holding in BT Investment Management from 59 per cent to 31-40 per cent, generating $600-$700 million for the bank and increasing its Common Equity Tier One capital by 10-15 basis points.

ANZ sold its car financing business Esanda to Macquarie on 8 October 2015, raising $100 million for ANZ and increasing its Tier One ratio by 20 basis points.

 

Capital focus to drive bank divestment in 2016
mortgagebusiness

 

Latest News

The federal government has commissioned the ACCC to conduct a new inquiry into the pricing of home loan products in Australia’s mortgage...

The ABS has reported an investor-driven “pop” in home loan activity, which, according to ANZ Research, could be a cause for “concern...

The major bank has pledged $2 billion in funding and services to assist not-for-profit affordable and specialist housing providers, includin...

FROM THE WEB
podcast

LATEST PODCAST: Mortgage pricing and product switching

Do you think the mortgage market will see more consolidation this year?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.