Is the ANZ Bank share price still a buy after today’s update?

In morning trade the Australia and New Zealand Banking Group (ASX: ANZ) share price has edged higher despite the release of an update on its wealth business sale.

At the time of writing the bank’s shares are up over 1% to $25.98.

What was in the update?

The banking giant released the update in response to news that the Australian Prudential Regulation Authority (APRA) has taken regulatory action against IOOF Holdings Limited (ASX: IFL).

According to the release, APRA has advised that it is seeking Federal Court approval to disqualify three executives and two directors from the industry, including its chairman and managing director, for failing to act in the best interests of superannuation members.

In addition to this, APRA is aiming to have additional licence restrictions placed on IOOF.

What does this mean for ANZ Bank?

In October 2017 the bank agreed to sell its OnePath Pensions and Investments business to IOOF for a cash consideration of $975 million. This latest news has caused a few doubts about the transaction.

ANZ Bank’s deputy CEO Alexis George said: “Given the significance of APRA’s action, we will assess the various options available to us while we seek urgent information from both IOOF and APRA.”

Before adding that: “The work to separate Pensions and Investments from our Life Insurance business continues. There is a framework available to complete the Zurich transaction that does not involve IOOF.”

What now?

While this is a slight blow for ANZ Bank, I don’t think it changes things too much. I still think the bank would be a great option for investors that don’t already have exposure to the sector along with Westpac Banking Corp (ASX: WBC).

IOOF Holdings, on the other hand, is not a company I would be in a hurry to invest even after its significant share price decline today.

I would suggest investors wait to see how the situation unfolds before considering an investment.

Top 3 ASX Blue Chips To Buy For 2019

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked…

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of The Motley Fool’s Top 3 Blue Chip Stocks for 2019.

Each one pays a fully franked dividend. The names of these Top 3 ASX Blue Chips are included in a specially prepared FREE report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

See the 3 blue chip stocks

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.