UPDATE 1-Westpac to sell Australia life insurance unit to Japan’s Dai-ichi for $660 mln

(Reuters) -Westpac Banking Corp 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.

FILE PHOTO: FILE PHOTO: A pedestrian looks at his phone as he walks past a logo for Australia’s Westpac Banking Corp located outside a branch in central Sydney, Australia, November 5, 2018. REUTERS/David Gray/File Photo/File Photo

The deal underlines a rapid exit by Australian lenders from insurance businesses, as increased regulatory scrutiny following a 2018 Royal Commission led them to double down on their banking business and streamline operations.

Companies including conglomerate Macquarie Group, insurer Suncorp Group Ltd and wealth manager AMP Ltd have cut their exposure to the sector in the last five years.

“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.

Dai-ichi did not immediately respond to a request for comment.

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 sale is expected to be completed in the second half of 2022.

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.

($1 = 1.3637 Australian dollars)

Reporting by Shashwat Awasthi and Riya Sharma; Editing by Muralikumar Anantharaman and Rashmi Aich

Share:

Facebook
Twitter
Pinterest
LinkedIn

Leave a Comment

Related Posts

8 Financial Tips For Young Adults

By Aysia Morton May 20, 2022 / 11:13 AM Financial realities might be a tidal wave when you’re a young adult. You’re given new duties, such as how much money you need to spend, save, or invest. It might be frustrating and difficult to understand. Even searching the internet for financial help can be daunting.

Read More »

After George Floyd’s murder, Wall Street promised billions of dollars to help Black Americans. 2 years later, here’s where that money went and how it’s being used.

As Dominik Mjartan approached JPMorgan’s towering global headquarters on New York City’s Park Avenue on a Friday afternoon in September, he couldn’t help but feel skeptical. Mjartan, the CEO of Optus Bank, a South Carolina lender with $350 million assets under management, was there to meet Jamie Dimon, the CEO of JPMorgan. The meeting was

Read More »

International 7-Day News Agenda

Text size Please note that all times are in GMT. Major events are listed under ‘Highlights’. For full details of our coverage of top stories, please see our regularly updated News Advisory. (+) : Event added in the last 24 hours. (*) : Event updated in the last 24 hours. UNITED STATES – Covid test

Read More »

8 Financial Tips For Young Adults

By Aysia Morton May 20, 2022 / 11:13 AM Financial realities might be a tidal wave when you’re a young adult. You’re given new duties, such as how much money you need to spend, save, or invest. It might be frustrating and difficult to understand. Even searching the internet for financial help can be daunting.

Read More »

After George Floyd’s murder, Wall Street promised billions of dollars to help Black Americans. 2 years later, here’s where that money went and how it’s being used.

As Dominik Mjartan approached JPMorgan’s towering global headquarters on New York City’s Park Avenue on a Friday afternoon in September, he couldn’t help but feel skeptical. Mjartan, the CEO of Optus Bank, a South Carolina lender with $350 million assets under management, was there to meet Jamie Dimon, the CEO of JPMorgan. The meeting was

Read More »

International 7-Day News Agenda

Text size Please note that all times are in GMT. Major events are listed under ‘Highlights’. For full details of our coverage of top stories, please see our regularly updated News Advisory. (+) : Event added in the last 24 hours. (*) : Event updated in the last 24 hours. UNITED STATES – Covid test

Read More »
Scroll to Top