(Reuters) – National Australia Bank said it had agreed to combine its New Zealand wealth advice and asset management unit with that of Jarden Wealth and Asset Management, forming a new entity with about NZ$29 billion ($17.99 billion) of funds under advice and administration.
The new entity, to be called FirstCape, would also hold NZ$15 billion of funds under management, NAB said on Thursday.
The combination would bring together NAB’s JBWere New Zealand and BNZ Investment Services business with Jarden’s Wealth Solutions and Harbour Asset Management to create an advice and asset management business for clients in New Zealand, NAB said.
The combination also allows NAB to expand product offerings by its unit Bank of New Zealand (BNZ) under the voluntary retirement plan, KiwiSaver Scheme.
NAB, Jarden Wealth and Pacific Equity Partners would be the shareholders of FirstCape. NAB and Jarden would each receive a cash payment along with a retained shareholding of 45% and 20%, respectively.
Pacific Equity Partners would acquire a 35% stake in FirstCape and its investment would be used to fund the payments to NAB and Jarden Wealth.
NAB said the combination would result in a gain on sale within statutory net profit, but will not have an impact on the lender’s core capital levels.
Malcolm Jackson, the current chief executive of Jarden’s Wealth and Asset Management business, would be named the CEO of FirstCape.
The management team of the new entity would also comprise of executives from JBWere New Zealand, BNZ, Jarden Wealth and Harbour Asset Management teams.
Shares of NAB were up 1% at A$30.06 at 2329 GMT.
($1 = 1.6124 New Zealand dollars)
(Reporting by Echha Jain in Bengaluru; Editing by Krishna Chandra Eluri and Rashmi Aich)
