Australia and New Zealand Banking Group Ltd (ASX: ANZ) is exiting its share investing platform in a deal with share broker CMC Markets PLC (LON: CMCX).
End of a brokerage era for ANZ
ANZ announced that it has reached an agreement with CMC Markets to transition customers from its ANZ Share Investing platform to a CMC Markets branded platform. The deal forms part of the big 4 banks’ strategy to simplify its business.
Customers of ANZ Share Investing will begin to see CMC Markets branding over the next 12 to 18 months. ANZ will no longer receive revenue from share investing activities at the end of a transition period.
ANZ said that the revenue it gets from share investing activities is not material. It will continue to manage and provide cash management solutions to share investing customers.
CMC has provided ANZ with share trading solutions since 2018.
Further details
CMC is listed on the London Stock Exchange and gave further details in its announcement.
Under the deal CMC will pay $25 million, with ANZ transitioning over 500,000 customers with total assets adding up to more than AUD$45 billion.
It said that after the transition ANZ Share Investing clients will benefit from lower brokerage charges on the CMC platform than they previously experienced.
Final thoughts on the ANZ share price
There has been a trend for the big banks to streamline their businesses following the Banking Royal Commission.
Share brokerage has become a competitive industry and it might be a good move that ANZ is bidding it farewell. Share brokerage may become a new “race to the bottom” for profits as newer competitors push brokerage prices lower to gain market share.
As it is a small deal it hasn’t had a material effect on the ANZ share price. It is a noteworthy change however, as it is an end of an era for ANZ’s share broker platform and for customers who have been ANZ Share Investing customers.