ANZ to buy out remaining 51% of ING Australia and ING New Zealand (Update 3)

ANZ and ING said in a statement released in Australia that ANZ would buy out the remaining 51% stakes in ING Australia and ING New Zealand that it doesn't already own for 1.1 billion euro in cash. ANZ will use its existing capital to make the acquisition. (Update 3 includes more on ING's New Zealand operations.) The full powerpoint presentation from ANZ is presented below, which includes reference on Page 3 to a A$55 million payment to ING to buy out ING's redeemable preference shares in ING NZ's frozen Diversified Yield Fund (DYF) and Regular Income Fund (RIF). The slump in the value of the RIF and DYF funds have been an operational and reputational nightmare for both ING and ANZ in the last year, triggering protests outside banks by angry ANZ customers who were advised into the fund by ANZ advisors. Investors were given a final offer by ING and ANZ in May regarding their investments in the fund. ANZ and ING together put up NZ$400 million to increase returns to investors. ANZ Group said the estimated impact of the purchase on the bank's tier 1 capital would be an estimated A$1.9 billion, or the equivalent of 70 basis points off its tier 1 ratio. This would take the ratio to around 9.5% from 10.2% now, although this would still be higher than the bank's stated 7.5% to 8% target range. ING NZ is New Zealand's biggest Kiwisaver provider, with over 20% of the market. It has 213,000 members and NZ$523 million in the four schemes it manages (ING, ANZ, National Bank, SIL). It is also the second largest fund manager and manufacturer of retail and wholesale managed funds, as well as being one of New Zealand's fastest growing life insurers. ANZ will also be taking ownership of ING's property funds, the ING Medical Trust and the ING Property Trust. ANZ National CEO Jenny Fagg said Helen Troup will continue as CEO of ING New Zealand. "The acquisition will strengthen our wealth management position in New Zealand by increasing our funds management and life insurance capabilities, currently offered to customers through our ANZ and The National Bank brands," Fagg said. "It will give us the flexibility to pursue further growth opportunities in a sector we know well through our direct involvement and as an existing shareholder in ING NZ," she said. "This acquisition demonstrates our commitment to the financial sector, and to the development of the funds management and life insurance industries in New Zealand." "Accelerated growth in the past five years has put ING NZ in leading market positions in funds management, life insurance and listed property trusts. ING NZ has total funds under management of approximately NZ$7 billion. The combined funds under management for ANZ National and ING NZ will be approximately NZ$12 billion." "An agreement had been entered into with ING Group allowing the continued use of the ING brand for up to 12 months."