National Australia Bank's joint venture with Nippon Life, which will see the Japanese company acquire 80 per cent of NAB's life business, is a sign of things to some in the wealth management businesses of the major banks, a leading banking analyst forecasts.Citi banking analyst Craig William has released an extensive review of the big banks, in which he argues that pressure on earnings in coming years will prompt the banks to reduce their exposure to wealth management.Citi estimates that big bank net profit growth will fall by almost half, from an average of 4.5 per cent a year in the years from 2009 to 2015, to an average of around 2.5 per cent a year in future.Earnings growth is slowing as a result of ongoing regulatory pressure on the banks to hold more capital, combined with rising funding costs and the impact of slower economic growth.Citi says wealth management has done well for the banks, contributing 15 per cent of overall revenue growth between 2009 and 2015, while only requiring about ten per cent of their equity capital allocation.However, profitability has declined, largely as a result of weakness in life insurance.In addition, changes in banking regulatory capital treatment have meant additional core capital needs to be allocated to wealth management divisions.By the end of 2015 big bank wealth management divisions were a drag on group return on equity. For example Commonwealth Bank's ROE in the 2014/15 financial year was 18.2 per cent but its wealth management division ROE was 13 per cent."We see a reduction in the major banks' exposure to wealth management," Citi says.NAB's deal with Nippon Life involves NAB selling 80 per cent of its life business to Nippon Life and retaining 20 per cent, which will give it access to distribution of life products.NAB is retaining ownership of its superannuation, other investment and advice businesses. Nippon Life has a ten-year licence agreement to use the MLC brand for life insurance.The deal has required the separation of the life insurance manufacturing business from NAB's superannuation and investments business to create a standalone life company.Last week the bank announced that it would merge five superannuation funds into one - the MLC Super Fund - which will have A$70 billion of assets.ANZ is also making changes to its wealth business. In March the bank announced that its Australian private bank would become the responsibility of the group executive Australia, and that ANZ-branded wealth distribution, including financial planning, would move into retail distribution.In New Zealand, wealth will become part of an expanded retail, business banking and wealth division. In Asia, wealth will be folded into the Asian retail business.The remaining insurance, superannuation and investment activities in Australia will become a business called Australia Wealth. This business is under review, with much speculation about a sale or joint venture.Citi says such moves give the banks an opportunity to reduce the capital requirements of owning wealth management businesses, while keeping access to product distribution and advice. It expects to see further developments