NAB joins Australian exodus from wealth management business

The bank’s MLC subsidiary will be sold by the end of 2019.

National Australia Bank has confirmed its plans to sell its $3b MLC subsidiary by the end of 2019 which follows a series of exits by the country's major lenders from the wealth management business.

“We do think serving the wealth needs of our clients is important, but we have to do it differently. I think divesting this will simplify the bank dramatically. Right now I think the cost of complexity is really high in terms of mistakes and customer experience,” said NAB conference chief executive Andrew Thorburn.

The bank earlier sold 80% of its life insurance arm to Nippon Life, in a deal that allows NAB to distribute the insurance policies.

"We need to simplify the bank. Complexity in the bank is just killing us," Mr Thorburn told reporters in a media briefing.

Another major lender ANZ has already exited the wealth and insurance markets after selling its operations in five Asian markets to Singapore’s DBS in 2016 which is part of the bank’s long-term plan to go back to its core competencies. Commonwealth Bank also sold its CommInsure and Sovereign to AIA.

Also read: Australian banks speed up Asian retreat as competition and oversight mounts

Only Westpac remains in the wealth management business out of the country’s four largest lenders.

The exit comes against a series of scandals unveiled by Australia’s Royal Commission which revealed a decade of corporate wrongdoing and unethical practices which ranges from lying to regulators, falsification of documents, taking bribes and extracting fees from dead customers.