Westpac (ASX:WBC) shares up on merging super assets, selling Advance

Be the First to Comment Read

Westpac (ASX:WBC) shares up on merging super assets, selling Advance

More on:
Westpac Banking Corporation (ASX:WBC) shares
Image source: © Esmehelit | Megapixl.com

Highlights

  • Westpac shares were trading in the green today.
  • The shares of Westpac gained because of the update on its superannuation business.
  • Westpac is selling its Advance asset management business and merging BT's personal and corporate superannuation funds with Mercer Super Trust.

Through a successor fund transfer (SFT), Westpac Banking Corporation (ASX:WBC) and BT Funds Management have agreed to merge BT's personal and corporate superannuation funds with Mercer Super Trust.

Westpac also announced that it had reached a deal with Mercer Australia to sell its Advance Asset Management business (Advance).

On the back of two new announcements, the bank's shares were trading 1.09% higher at AU$24.13 each at 11.18 AM AEST on ASX today (26 May 2022). This outperforms ASX 200 Banks Index, which was 0.78% up at 2,776.50 points at 11.19 AM AEST.

Now, let's take a look at both the deals separately.

BT’s merger with Mercer

Australia's oldest bank Westpac announced today (May 26) that it would transfer AU$37.8 billion handled in its BT-branded corporate and retail super funds to the Mercer Super Trust.

The Westpac employee default plan, Westpac Group Super Plan, is included in merging BT's personal and corporate superannuation funds. Mercer will offer BT employees who support these funds employment as part of the deal.

Superannuation held on Westpac's BT Panorama and Asgard systems is not covered by the agreement.

Also Read: CBA, NAB, WBC, ANZ: How are ‘Big-4’ bank stocks performing post elections

Source: © Mohammedsoliman4 | Megapixl.com

In 2002, Westpac Banking Corporation purchased BT Financial Group (BT). Since 1969, BT has been one of Australia's premier wealth management organisations, helping Australians safeguard, manage, and develop their wealth.

Westpac to sell Advance to Mercer Australia

Westpac also announced that it had reached a deal with Mercer Australia to sell its Advance Asset Management business (Advance).

Advance is a multi-manager investment firm that offers a range of fund management services and products, including BT Super's personal and corporate superannuation plans.

It manages a range of products provided through BT Panorama and has AU$43.7 billion in funds under management at the end of March.

Image Source: © 2022 Kalkine Media ®

Data Source- Company announcement dated 26 May 2022

Other details

The fund transfer and sale are expected to be completed in the first half of 2023, pending regulatory approvals.

The deal accelerates Westpac's exit from the wealth management sector, which began in March 2019 with the closure of its financial advisory licensee companies in the wake of the devastating Hayne royal report.

Image Source: © 2022 Kalkine Media ®

Data Source- Company announcement dated 26 May 2022

Westpac announced in April that it would write down the value of its problematic superannuation business to zero, following criticism from the prudential regulator and Labor MPs.

The bank is estimated to lose around AU$80 million (after tax) due to the separation of transaction expenses linked with the Mercer sale. However, it stated that the revenues from the sale of the Advance business would offset this, resulting in a total after-tax gain of AU$225 million.

What is Mercer Super Trust?

The Mercer Super Trust is a major, award-winning Australian superannuation fund that offers a variety of member benefits, such as low costs and stable returns. The Responsible Investment Association of Australasia has also named them a leader in sustainable investing (RIAA). It presently manages assets at more than AU$500 billion.

Also Read: Westpac (ASX:WBC) goes ex-dividend; what about dividends of CBA, NAB, ANZ?

Disclaimer

Speak your Mind

Featured Articles

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK