Shares in National Australia Bank Ltd. (ASX: NAB) are falling lower today, down 0.44% to $29.43, amidst speculation that NAB may divest parts of its business. According to the Australian Financial Review, NAB engaged in preliminary discussions to sell a stake in its funds management operations to Nippon Life.
NAB is conducting a strategic review of its wealth business – which has $134 billion of funds under administration as at September 30 – and is considering several options, including an IPO of the division or the divestment of parts or all of it. Broking and advice arm JBWere might be subject to a management buyout according to the paper.
Other big banks have contemplated similar moves. In October, Australia and New Zealand Banking Group (ASX: ANZ) and IOOF Holdings Limited (ASX: IFL) struck a $1 billion deal over the sale of ANZ's OnePath pensions and investments business, and Commonwealth Bank of Australia (ASX: CBA) is considering selling its global asset management operations.
If NAB ends up divesting, Nippon Life will be a likely buyer. The Japanese insurer knows NAB well, since it bought 80% of its life insurance operations in 2016 for $2.4 billion, and lately has been pursuing an aggressive acquisition strategy.
