For the second time in two years Westpac has sold off a large chunk of BT Investment Group, lowering its exposure to fund management.
Westpac will offload up to $645 million worth of stock to institutional investors, the bank also signalled it intends to ultimately sell all shares it holds in the business. It will use the revenue from the sale to bolster its balance sheet.
Fellow Australian firm Macquarie is acting as broker and underwriter on the deal, which will see Westpac reduce its stake in the investment manager from 30 percent to 9.8 percent by the end of this week.
In a statement to the Australian Stock Exchange the bank said «While BT Investment Management (BTIM) will remain a strategic partner, following the selldown some changes in the arrangements between Westpac, BT Financial Group (BTFG) and BTIM will occur over time.»
Shoring Up Capital
The sale will lower Westpac's exposure to funds management, and raise capital at a time when banks are building up larger resources to protect them against future shocks and the new Australian Government tax levy on banks.
The deal does not change Westpac's ownership of BT Financial Group, the wealth management business that is fully owned by the bank and is a key vehicle for selling products in superannuation and insurance.
