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ING/ANZ deal gets Morningstar’s tick

RESEARCH house Morningstar has maintained its confidence in the ING Group and the ANZ Bank following the joint venture between the Australian and Dutch banks.

“The joint venture gives ANZ fund investors the benefit of ING’s marketing and distribution expertise and better investment capabilities,” Morningstar said.

“For ING fund investors, the JV now ensures the ING Group is indeed fully committed to the Australian market.”

But Morningstar warned that the risk lies with the ability of the two groups to successfully integrate their two distribution cultures.

“The other main risk for ING fund investors is that extra size can adversely affect performance,” the group said.

“Morningstar has therefore retained a ‘positive’ outlook for ING Investment Management’s Sector Strength Rating: Australian Equities Trend Rating.”

ING Group formed a funds management and life insurance joint venture with ANZ Bank on April 10. The JV, 51 per cent owned by the ING Group and 49 per cent owned by ANZ Bank, is calling itself ING Australia Ltd.

Morningstar said the deal meant that ING had effectively sold half of its Australian business to ANZ.

“However, this does not signal that the ING Group wishes to withdraw from the Australian market,” it said.

“Quite the reverse. ANZ is paying $960 million to the ING Group to gain 49 per cent of much of the business of the former ING Australia Ltd. ING Investment Management in Australia has been specifically excluded from being part of the JV.”

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Total Shareholder Return as at 30/09/16

1 year TSR5 year TSR
178thCIMIC Group70%16%
356thAmcor19%24%
399thANZ Banking Group9%14%
526thQantas-9%19%
722 WA (and selected non WA) listed companies ranked by 1 year TSR relative to other companies with similar revenue
Source: Morningstar

Revenue

8th↓ANZ Banking Group$21,071.0m
9th-Qantas$16,200.0m
12th-CIMIC Group$13,325.4m
13th↓Amcor$12,811.1m
77 listed non wa companies ranked by revenue.
Source: Morningstar

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