Westpac will boost capital and consolidate focus around its local business following the sale of its general insurance arm to Germany’s Allianz.
The deal was valued at A$725 million ($535 million), according to a statement, and it includes a 20-year distribution agreement to sell motor, travel, home and other insurance products to Westpac customers.
Pending regulatory approval, the deal is expected to be finalized by the second half of 2021.
According to analysts, the deal price is equivalent to about eight to 12 times earnings which would not only up its core capital but also result in a small post-tax profit in the fiscal year of 2021.
More Non-Core Sales
The sale was announced a day after the banking regulator forced Westpac to increase its cash holdings until the independent review of its risk management is completed.
The bank will now continue seeking buyers for its other non-core businesses including its wealth management and banking units in Fiji and Papa New Guinea.
