IOOF Holdings Limited (ASX: IFL) provides financial advice, products and services to Australians. IOOF has a market capitalization of A$2.7 billion.
What are the recent developments in IOOF activities?
On 9 December 2019, the Australian Prudential Regulation Authority (APRA) approved IOOF to hold the controlling stake in OnePath Custodians Pty Ltd and Oasis Fund Management Ltd. These approvals were the last remaining requirements in relations to the transfer of the ANZ Wealth Pension and Investment business (ANZ P&I) to IOOF.
IOOF CEO Renato Mota said:
APRA’s approval represents an important milestone and allows for the creation of an industry leading advice-led wealth management organisation. Our recent investment into uplifting governance and client focus provides a valuable foundation which will benefit all clients and members including those from the ANZ P&I business. We look forward to continue to challenge ourselves to deliver accessible, advice-led wealth management for the benefit of all Australians.
It is also important to note that IOOF is recovering from a 52-week low in its share price of $4.19 in late 2018. The slump in IOOF’s share price in late 2018 reflected court action by APRA against IOOF executives and directors and issues arising out of the Hayne royal commission into financial services. The court action by APRA has been resolved in favour of the IOOF executives and the issues raised by APRA around conflict of interest are being resolved. In particular, APRA’s approval of IOOF acquisition of ANZ P&I is further evidence IOOF is addressing the concerns raised by APRA to APRA’s satisfaction.
What is the market reaction?
The market reaction to APRA’s announcement on IOOF activities is positive. IOOF share price is up around 2.5% and is currently trading at A$7.98. IOOF has a forward P/E ratio in the low-teens and an annual dividend yield of 4.8% (fully franked).
This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)
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