Westpac yesterday signalled the possible sale of several wealth assets including its superannuation and insurance operations and wealth platforms.
It has created a new “specialist businesses division”, which will be led by Jason Yetton, a former head of retail banking at Westpac who returns from the Commonwealth Bank.
Mr. Yetton will lead a strategic review of Westpac’s sub-scale operations across superannuation, wealth platforms, investments, insurance, auto finance, and the Pacific.
CEO Peter King said, “over the coming months we will conduct a detailed strategic review on the best options for these businesses.”
This will include considering whether they would ultimately be more successful under different ownership.
ANZ and NAB are also looking more deeply at their businesses.
Both have already sold or are in the process of selling off businesses like fund management/wealth advice arms, insurers – life and general, and reducing their involvement in non-banking businesses.
So it would seem that the fad involving cross-selling products by customer-facing staff, such as tellers and managers, will be going or reframed and called something else.
Westpac yesterday joined the ANZ in deferring its interim dividend.
The bank said its board would review dividend options over the year, but it would not make a dividend payment in June due to the uncertainty created by the pandemic.
“This was a difficult decision given many retail shareholders rely on Westpac dividends,” the bank said.
Given the economic outlook forecast by Westpac, other banks and analysts, playing a conservative game on capital management such as paying dividends, is a safe option.
Westpac expects the economy to decline by more than 8% over the year to September and house prices to fall around 20%, with 15% of that happening tis year and 5% in 2021.
Unemployment is forecast to peak at 9% mid-year before easing to 7% by year’s end.
And the 4% recovery it is forecasting for 2021 will not make up for the losses this year and the economy will end 2021 smaller than it was at the end of 2019.
Investors gave a thumbs up in the end to the 60% drop in earnings, deferment of the dividend, the absence of an issue, and the news of the looming slimming campaign. The shares rose 2.8% to $15.77.
