Australia's leading banks are falling over themselves in their rush to expand their fund management businesses. ANZ is forming a joint venture with ING's Australian fund management business and Westpac is buying Rothschild Australia Asset Management.
Australian banks have been under pressure to grow their investment businesses. "The reason is that in Australia we've got legislated growth in superannuation which means it grows very quickly," says Brian Johnson, banking analyst at JPMorgan. Banks not making moves in wealth management face the risk that their retail deposit bases will be cannibalized as people increasingly invest their savings in mutual funds.
ANZ's deal with ING will create Australia's fourth-largest retail fund manager and New Zealand's largest with a total A$38.4 billion (US$20.9 billion) of funds under management. The new entity will be called ING Australia and will include ANZ Investments and ING's Australian and New Zealand fund management and life insurance businesses.
