NAB to buy Aviva's Australia business

SYDNEY (Reuters) - National Australia Bank (NAB.AX) has agreed to buy most of insurer Aviva's (AV.L) Australian businesses for A$825 million (402 million pounds) to boost its clout in the fast-growing wealth management industry.

NAB, the nation's top lender, has identified wealth management, insurance and its advisory business as key growth areas under its new Chief Executive Officer Cameron Clyne.

Australian lenders have largely dodged the global financial crisis and are better placed to grow their businesses with their focus on domestic markets. In contrast, some of the big U.S. and European banks have exited the Australian market due to trouble faced by their offshore parents.

Last year lender HBOS HBOS.L sold its Australian unit to Commonwealth Bank of Australia (CBA.AX).

NAB said in a statement that the acquisition would add about A$12 billion to the bank's funds under management and complement its wealth management business MLC. NAB also expects about A$70 million in annual pre-tax savings from the deal.

The deal is subject to regulatory approvals.

NAB, which beat off competition from AMP (AMP.AX) for the assets, said it expected to complete the acquisition in the fourth quarter of 2009.

Aviva had appointed Morgan Stanley and JP Morgan to advise on the sale.

A sale could help Aviva to ease worries about its capital position, which has been a cause of concern for some investors after the group left its 2008 dividend unchanged in March.

($1=A$1.25)

(Reporting by Denny Thomas; Editing by James Thornhill)