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National Australia Bank (NAB) has earned a positive assessment from global ratings house Fitch Ratings, along with a warning that its proposed acquisition of AXA Asia Pacific is not without risk.
The Fitch Ratings assessment of NAB pointed to the fact that the banking group had undertaken a number of acquisitions in both the banking and wealth management areas in Australia during the global financial crisis, which had generally been modest in size and with integration appearing to be proceeding well.
However, looking at the NAB bid for AXA Asia Pacific, the ratings house noted that while the banking group was working to address the concerns raised by the Australian Competition and Consumer Commission, it would represent “a relatively large acquisition, presenting some integration risk”.
“However, the impact on NAB’s capital position appears manageable and it could provide benefits to NAB’s already robust wealth management operations,” the assessment said.
Fitch said it viewed NAB’s wealth management operations positively due to the relatively low-risk, low-capital nature of the businesses and the strong potential for growth given Australia’s compulsory pension regime.
