By Annie Kane | Mortgage Business
Bendigo and Adelaide Bank Limited has agreed to acquire the ANZ Investment Lending portfolio – which has approximately 11,900 customer facilities – to further grow its margin lending business, Leveraged Equities Limited.
The portfolio is valued at approximately $715 million and is expected to take the combined value of the bank’s margin lending portfolio to more than $2 billion at completion.
The deal is expected to complete “in the first half of calendar year 2023”.
According to Bendigo and Adelaide Bank, it will pay “an immaterial premium over book value” for the portfolio. The bank noted that “given the relatively small size of the acquisition”, it will be funded through the ordinary course of business operations.
The acquisition of the portfolio is aligned with the bank’s objective of growing its return-on-equity.
Marnie Baker, Bendigo and Adelaide Bank’s managing director and CEO, commented: “In line with our vision to be Australia’s leading bank of choice, the acquisition will strengthen Leveraged Equities’ position as an industry leader in margin lending and enhance the scale of our existing operations.
“The portfolio we are acquiring is well established and primarily comprises retail customers which will complement Leveraged Equities’ client base of professionals and clients under advice.
“We believe there is a strong future for Margin Lending in Australia, and this acquisition will create further opportunities for growth.”
The head of Leveraged Equities, Lily Elliott, added: “The acquisition aligns with our Leveraged Equities growth strategy and ambition to maintain our leading market position…
“We pride ourselves on the level of service we provide. As the business grows, we look forward to continuing to deliver a high-quality solution as a trusted partner for customers who are just starting out on their investment journey, clients under advice and investment professionals.”
ANZ has confirmed that it has agreed to divest its Share Investment Lending portfolio to Leveraged Equities, a wholly owned subsidiary of Bendigo and Adelaide Bank.
“The divestment is consistent with ANZ’s simplification agenda and the financial impact is not material to ANZ,” it said n a statement.
The sale of its margin lending business is the latest in a series of wealth divestments the major bank has made in recent years as it continues its focus on retail banking.
It offloaded its life insurance business to Zurich Financial Services Australia in 2017 and sold its New Zealand-based life insurance business the year after.
Last year, ANZ reached an agreement to transition customers from its ANZ Share Investing platform to a CMC Markets-branded platform.
CMC Markets has provided a share trading solution under the ANZ Share Investing brand since 2018.
In 2016, Bendigo Bank and CMC Markets co-developed the bank’s online share trading platform – Bendigo Invest Direct (BID) – which allows investors to conduct trades and access market research on their mobile devices.