The Big Four banks’ wealth management divisions, which include life insurance, saw cash profits remain almost static during their full-year reporting periods.

According to KPMG’s 2012 Bank Survey, cash profits in the 2012 financial reports were $2.2 billion compared to $2.4 billion in the previous reporting period.

NAB was the only one of the Big Four to report increased revenue from its annuities portfolio and direct asset management.

This gave NAB 4.3% growth in its wealth management division, compared to a 1.4% decline at ANZ, an 11.4% fall at Commonwealth and a 10.4% decline at Westpac.

The Big Four had mixed results with their life insurance businesses, according to the KPMG report.

ANZ’s insurance revenue increased in the second half as a result of favourable claims experience and increased premiums. Business simplification initiatives have helped lower costs in running ANZ’s insurance business.

NAB’s wealth management growth was partly driven by MLC’s insurance products, but there was an increase in lapses and unfavourable changes in the profile of the retail insurance book.

This partly offset the growth in average inforce premiums and improvement in claims. 

In its analysis of the Big Four 2012 financial results, PricewaterhouseCoopers (PWC) says lower insurance claims and solid sales saw insurance net revenue improve.

“Wealth management returns were assisted by a rebound in insurance premiums, with fewer disasters reducing the level of claims,” the report says.

The banks continue to spend heavily on technology to drive efficiencies in their operations, including wealth management.

PWC says the banks’ combined technology costs rose 4.6% to $3.9 billion during the 2012 reporting period.

This included $1 billion of software amortisation costs, but the capitalised software total was up by $1 billion to $6.5 billion.