ANZ completes $2.85 billion OnePath Life sale to Zurich

The Australia and New Zealand Banking Group (ASX:ANZ) share price will be on watch after it completed the $2.85 billion sales of OnePath Life to Zurich…

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The Australia and New Zealand Banking Group (ASX: ANZ) share price will be on watch this morning after the banking giant announced the completion of an asset sale.

What has ANZ sold?

This morning ANZ announced that it has now completed the sale of its Australian life insurance business, OnePath Life, to Zurich Financial Services Australia.

The deal, which was originally announced in December 2017, is worth a total of $2.85 billion and includes a reinsurance arrangement.

According to the announcement, the completion of the sale marks the start of a 20-year agreement for Zurich to provide life insurance products to relevant ANZ customers through the bank’s channels.

ANZ Group Executive Wealth, Alexis George, said: “The completion of this sale demonstrates a significant step in our strategy to simplify ANZ while also providing ongoing support for our customers who want protection with life insurance solutions.”

She added: “Importantly, current ANZ and OnePath life insurance customers will continue to receive the same high quality service and solutions from Zurich, a global insurer with a strong track record of service and innovation.”

In addition to this, ANZ has removed a significant number of employees from its books. As of today, more than 500 former ANZ staff members have joined Zurich as part of the transaction.

What about the rest of its Wealth business?

Also announced in 2017 was the sale of its OnePath Pensions and Investments and Aligned Dealer Groups businesses to IOOF Holdings Limited (ASX: IFL) for $975 million.

This deal is looking a lot less likely than the agreement with Zurich. Last month the embattled financial services company provided an update on the deal and advised that it remains conditional on the receipt of notices from OnePath Custodians (OPC) and ANZ that each have no objection to the P&I Acquisition proceeding.

IOOF continues to work co-operatively with OPC and ANZ to provide the information and resources necessary to facilitate those notices being given.

However, if the deal is not completed by July 5, when changes to superannuation laws come into effect, the deal with also need to be approved by APRA.

And considering APRA is currently taking action against IOOF entities, directors, and executives for failing to act in the best interests of superannuation members, this adds a lot of uncertainty to the deal.

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