Westpac may delay sale of wealth management

Final bids for the Morgan Stanley-run Westpac wealth sale had been due on August 22. Picture: Britta Campion

Speculation is mounting that Westpac is about to hit pause on the sale process for its wealth management business and relaunch it when conditions improve.

It comes after chief executive Peter King last week said negotiations on selling the wealth management platform were progressing, although the bank was not targeting a specific time frame.

DataRoom understands that the competition frontrunner, Colonial First State, which is owned by Kohlberg Kravis Roberts and CBA, is no longer contending for the business.

There have been suggestions that AMP is now in the box seat, but many believe that while a transaction makes strategic sense for AMP, it is committed to concentrating on its capital return program to shareholders for now. One option is that AMP buys the business further down the track.

Some creative thinkers have also not dismissed the prospect of an asset swap where Westpac takes AMP’s bank for book value and AMP takes the wealth management unit.

Another thought is that Westpac breaks up the wealth management unit, where a party like AMP takes the BT Panorama platform, and the smaller Asgard part of the wealth management division is acquired by a party such as wealth manager HUB24.

Sources say management had proposed to Westpac’s board to retain the wealth unit, but directors insisted the operation be sold at a time that it needed capital investment and was not core to the bank’s operations.

Final bids for the Morgan Stanley-run Westpac wealth sale were due on August 22.

Sources say Colonial First State lobbed a bid that may have been as low as $600m.

Westpac reported in its full year results last week that funds under administration on BT Panorama were $95.9bn down from $105bn in March.