Following a strategic review which commenced in February 2020, Suncorp has sold its Australian wealth business for $45 million as the company simplifies its portfolio and hones its focus on its core insurance and banking operations.
The divestment of Suncorp Portfolio Services Ltd to LGIA super follows a strategic review and the sale of several other businesses over the past two years. “When I was appointed CEO, I said I wanted to align everyone at Suncorp around improving the way we deliver for our insurance and banking customers,” said Steve Johnston Suncorp CEO. “This approach is already delivering results, and the wealth sale will allow the Bank team to focus exclusively on the priorities we outlined at the interim result in February.”
Clive van Horen CEO Suncorp Banking & Wealth said: “After extensive engagement with a number of potential acquirers, we believe that LGIAsuper is best placed to deliver sustainable member outcomes. The values and purpose of LGIAsuper align closely with those of Suncorp. This transaction will also enable the combined business to take advantage of size and scale benefits.”
Total consideration is estimated at $45 million. This includes a fixed amount of $26.6 million, plus regulatory capital. Consideration is subject to standard completion adjustments. After allowing for separation and transaction costs, the impact of the transaction on Group profit is expected to be broadly neutral.
Following completion, Suncorp will continue to distribute the superannuation products to its customers for 18 months, while LGIAsuper will offer roles to about 130 employees who currently work directly or indirectly within the wealth business.
The wealth business transaction is expected to be completed next financial year, subject to regulatory approvals.