The National Australia Bank (NAB) has confirmed plans to sell its wealth management arm, MLC, in a bid to simplify the business.
“We need to simplify the bank. The complexity in the bank is just killing us,” stated Andrew Thorburn, CEO of NAB.
NAB is considering de-merge MLC, which it acquired in 2000 for $4.5bn (US$3.39bn), through a stock-market listing.
The bank made the announcement on 3 March, following the 16% drop in cash profit in the six months leading to March, hitting $2.76bn (US$2.08bn) due to the cost of restructuring.
NAB also noted its cash earning falling by 0.2% to $3.3bn (US$2.49bn).
The bank only saw a 1.5% rise in its six month net profit of $2.58bn (US$1.94bn).
“We do think serving the wealth needs of our clients is important, but we have to do it differently,” said Thorburn.
“I think divesting this will simplify the bank dramatically. Right now I think the cost of complexity is really high in terms of mistakes and customer experience."