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Non-major sells estates business to trustee company

by Reporter10 minute read

Bendigo and Adelaide Bank has announced that it has entered into a strategic partnership with Equity Trustees, after agreeing to sell the bank’s estates and trusts business to the trustee company for $5 million.

The non-major bank’s estates and trusts business was formerly managed by wholly-owned subsidiary Sandhurst Trustees. It has approximately 141 perpetual and ongoing trusts with $140 million in funds under management, and a will bank of more than 25,000 wills.

According to the bank, the decision to sell the business was made after it was found the estates business “lacked scale relative to the others in the market” and would require “significant investment” to bring it up to compete.

Managing director Mike Hirst explained: “Since the onset of the GFC, there has been a significant consolidation in the traditional trustee company industry resulting in fewer traditional trustee companies, driven by significant scale benefits and cost synergies.


“We constantly test the strategic alignment of our business to ensure that we are creating value for our customers and shareholders. As such, we’ve conducted an extensive review of the estates business, which found that without significant investment, our business lacked scale relative to the others in the market.

“It was therefore timely to look strategically at how this business currently supports our vision to be Australia’s most customer-connected bank, and whether entering into a partnership with others who had strategically invested in building scale would provide our customers and partners with an improved experience.”

Mick O’Brien, managing director of Equity Trustees, said that the acquisition was “consistent with [the company’s] strategy of growing in selected parts of the wealth value chain, and strengthens [its] position as a leading provider of trustee services”.

He added: “Our two organisations are an excellent fit. We both specialise in independent trustee services we have similar cultures and we share histories in Victoria as trustee companies dating back to the late 1800’s.

“With demographic changes increasing the demand for wealth protection and wealth transition services, the outlook is very positive.”

The company added that the strategic partnership will maintain the local office presence and “a strong relationship” with Sandhurst and with Bendigo and Adelaide Bank.”

Mr O’Brien added: “Equity Trustees has the same commitment to the values of customer service and individual care as Sandhurst and looks forward to maintaining that high standard in the region.

“We are committed to continuing the strong, enduring relationships with the people of the Bendigo region and their local organisations and community groups.”

Sandhurst Trustees will continue to maintain its funds management and superannuation businesses, which collectively account for around $5 billion in funds under management and administration, and its custody business.

The agreement for the sale is subject to ASIC approval.

[Related: Regional bank positions itself for broker channel growth]

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