ANZ to sell NZ asset finance to unit to Japan’s Shinsei Bank for $479 mln

ustralia and New Zealand Banking Group on Tuesday agreed to sell its New Zealand-based asset finance unit for NZ$762 million ($479 million) to Japanese financial institution Shinsei Bank Ltd.

Australia’s fourth-largest lender, which posted a plunge in first-half profit in April, remains one of the better capitalised banks with recent divestments strengthening its coffers as it faces the impact of the coronavirus pandemic.

The sale of UDC Finance provides about A$439 million ($298.08 million) of Level 2 Group CET1 capital, the lender said in a statement.

For ANZ, Level 2 as per regulatory supervision includes the capital of the group excluding associates, insurance and funds management entities, among others.

The Australian lender has been looking to sell UDC Finance for a while now after abandoning plans of spinning off the unit with a separate listing in 2018.

The sale will also release NZ$2 billion of funding provided by ANZ New Zealand, further strengthening its balance sheet position.

“Shinsei Bank intends to preserve UDC’s operations, retain UDC employees and provide long-term capital to maintain and grow customer lending in New Zealand,” ANZ Bank New Zealand CEO Antonia Watson said.

The Japanese lender said in a statement that its consolidated capital adequacy ratio is expected to decline about 0.4 percentage points once it acquires UDC Finance.

The sale is expected to be sealed in the second half of the 2020 calendar year.