Australia’s oldest bank Westpac (ASX:WBC)
has completed their $725 million sale of its general insurance business to Allianz. Along with the deal, Allianz entered into an exclusive 20-year agreement for the distribution of general insurance products to Westpac’s customers.
A further payment of $25 million is expected to be received by the $94.7 billion financial institution this calendar year subject to integration milestones, with contingent payments over the next five years in addition to ongoing payments under the distribution agreement.
Westpac expects to report a gain on sale of approximately $61 million, subject to the finalisation of completion adjustments and separation costs, that will be included in Westpac’s full year 2021 results and classified as a ‘notable item’.
The sale has added approximately 12 basis points to Westpac’s common equity Tier 1 capital ratio.
Westpac group chief executive specialist businesses & group strategy, Jason Yetton said “we have successfully executed a transition that helps our customers protect the things they value through a long-term partnership with a global insurance expert and helps us become a simpler bank".
Shares in Westpac (ASX:WBC)
are trading 0.5 per cent lower at $25.68.