Westpac Banking Corp (WBC.AX) on Monday became the latest Australian firm to retreat from the life insurance sector, as it agreed to an A$900 million ($660 million) sale of its domestic unit to Japan's Dai-ichi Life Holdings (8750.T).
"This transaction is another step in simplifying the bank," said Jason Yetton, chief executive officer of Westpac's specialist businesses and group strategy.
For Dai-ichi, the deal provides another avenue to boost its overseas business as Japan grapples with a declining population. The company bought Suncorp's Australian life insurance business for A$640 million in 2018.Westpac, which has already agreed to sell its general insurance and New Zealand life insurance arms, said the deal will add about 12 basis points to its level 2 common equity tier 1 capital ratio.
The lender expects an after-tax accounting loss of about A$1.3 billion on the sale, with about A$300 million to be realised in its fiscal 2021 results.The lender also said it signed an exclusive 20-year deal with Dai-ichi's local unit, which insures more than 4.5 million Australians, to sell life insurance products to Westpac's customers.Our Standards:Subscribe for our daily curated newsletter to receive the latest exclusive Reuters coverage delivered to your inbox.
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