Wealth management still to make a mark on bank earnings

A decade after making significant wealth management acquisitions in a bid to capture the shift in savings from bank accounts to superannuation funds, the big banks struggle to generate more than 10 per cent of their earnings from the sector.

According to a Goldman Sachs report published in July, Commonwealth Bank gets 13 per cent of its earnings from wealth management, National Australia Bank 10 per cent, Westpac nine per cent and ANZ six per cent.

Goldman Sachs says that a merged NAB and Axa would result in a 15 per cent contribution to group earnings from wealth management.

In the final year of the equity market boom, 2007, banks were able to generate 15 to 20 per cent of earnings from wealth management. It may be some time before they achieve those levels again.

According to Roy Morgan Research, NAB has an 18.9 per cent share of the superannuation market, followed by Commonwealth with 11.9 per cent, ANZ (11.5 per cent), Westpac (10.8 per cent) and St George (9.9 per cent).

Commonwealth has the top share in managed investments, with 34.2 per cent, followed by St George with 24.7 per cent, Westpac (24.1 per cent), NAB (22.5 per cent), and ANZ (14.9 per cent).

In the life insurance market NAB has the leading share, with 25.7 per cent, followed by Commonwealth with 24.1 per cent, ANZ (21.3 per cent), Westpac (17.8 per cent) and St George (6.9 per cent).