SYDNEY — Australia’s IOOF Holdings Ltd said it will buy National Australia Bank Ltd’s financial advisory arm for A$1.4 billion ($1.1 billion), making it the country’s biggest retail wealth management firm.
The deal underscores a dramatic reshaping of Australia’s retail finance industry after a public inquiry exposed regulatory scandals at the country’s top lenders, forcing them to carve off non-essential businesses. Both IOOF and rival AMP Ltd, the country’s oldest wealth advisory firm, were also hit hard by the inquiry.
The purchase of MLC, which follows IOOF’s acquisition of wealth management assets from Australia and New Zealand Banking Group Ltd last year, will take its number of financial advisors to 1,884 in total, topping AMP’s 1,847.
It will also have the most retail funds under management – A$196 billion compared to Bankers Trust’s A$153 billion and AMP’s A$141 billion.
“We sincerely believe that this is … transforming the shape of the industry,” said IOOF CEO Renato Mota on an investor call.
NAB CEO Ross McEwan, who took the helm last December, said the deal would let the bank “focus on executing our refreshed strategy of delivering simpler, more streamlined products and processes.”