ANZ Completes Simplification of Wealth Australia

MELBOURNE, Australia, Dec. 12 -- Australia and New Zealand Banking Group issued the following news release:

ANZ today announced it has completed the simplification of its Wealth Australia division with the sale of its life insurance business to Zurich Financial Services Australia. The sale is comprised of two transactions with total proceeds of $2.85 billion, inclusive of $1 billion of upfront reinsurance commission from Zurich.

This follows the sale of its OnePath pensions and investments (OnePath P&I) and aligned dealer groups (ADG) business to IOOF Holdings Limited (IOOF) in October for $975 million. Total proceeds from the simplification of Wealth Australia is $3.83 billion.

Following completion, Zurich will be Australia's largest retail life insurer as measured by in-force premiums with more than 1.5 million customers, while IOOF will have a top-five superannuation platform with the second largest aligned financial advice network.

See table here (phx.corporate-ir.net/external.file?t=2&item=o8hHt16027g9XhJTr8+weNRYaV9bFc2rMd0Q/AXw4zs4lJW9Ytt2BhCHdfojQbm1dJgxGxMWSMw12k+jR5J/H7Kx+M6qksUuHk5ioQ9bknoDKbGqTy4zSOz7q/uY4ycV4HEaiIn65usUn/RgP9qQpQ==&cb=636486109803038455).

Capital released following reinsurance and completion of the life insurance sale is expected to increase ANZ's consolidated CET1 capital ratio by ~65 basis points and largely be surplus to ANZ's unquestionably strong requirements.

The sale is another step in ANZ's strategy to create a simpler, better balanced bank focussed on retail and business banking in Australia and New Zealand, and Institutional Banking supporting client trade and capital flows across the region.

As part of the agreement, ANZ and Zurich will enter into a 20-year strategic alliance to offer life insurance solutions through ANZ's distribution channels.

With a long history in Australia and a presence in more than 210 countries and territories, Zurich is a highly regarded insurance company with global capability in providing life insurance solutions to more than 60 million customers in partnership with 70 banks in 17 countries, including Santander, Citibank, HSBC, and ING.

ANZ Group Executive Wealth Australia Alexis George said: "From the outset we've been focussed on partnering with a high-quality organisation culturally aligned to ANZ and we're pleased we will be able to provide our customers with access to wealth products from one of the world's leading and most respected global insurers."

"Zurich's experience in working with banks around the world to provide insurance solutions, combined with its commitment to innovation and strong presence in Australia is a good outcome for our customers, shareholders and distribution partners.

"Partnering with Zurich is the best outcome for ANZ customers given it will become Australia's leading life insurer with the scale to invest in product and digital innovation.

"This transaction will complete the simplification of ANZ's Australian wealth business, however we will continue to work hard to minimise any disruption to our customers during the transition," said Ms George said.

There are no changes to any current insurance policies as a result of today's announcement, including general insurance products provided via QBE.

ANZ expects completion to occur in late 2018 together with the recently announced sale to IOOF of the Group's Pensions & Investments and Aligned Dealer Group businesses. The transaction, including the reinsurance, remains subject to regulatory approval.

A video interview with Chief Executive Shayne Elliott discussing this transaction will be available at bluenotes.anz.com at 7:30am (AEDT).

A support pack for this announcement has been lodged separately with the ASX and is available on shareholder.anz.com