(Reuters) -Westpac Banking Corp will sell its New Zealand life insurance business to Fidelity Life for NZ$400 million ($280.84 million), the companies said on Tuesday.
The unit is the latest asset to be offloaded by Australia’s second-largest bank over the past year as it narrows its focus to its core banking operations after a series of scandals ramped up regulatory scrutiny.
“This transaction is the latest step in simplifying our business,” Chief Executive Officer Peter King said in a statement.
Westpac expects the sale to add 7 basis points to its common equity tier 1 capital and result in a post-tax gain after it is completed by the end of the year.
Westpac Life New Zealand had annual in-force premiums of NZ$149 million as of the end of March, it said.
Fidelity, New Zealand’s largest locally-owned life insurer, said most of the deal will be funded by its largest shareholder NZ Super Fund and the investment arm of Te Rūnanga o Ngāi Tahu, which picked up a 24.9% stake for NZ$140 million on Tuesday.
As part of the deal, Fidelity will offer life insurance products to Westpac customers under a 15-year distribution deal, the companies said.
($1 = 1.4243 New Zealand dollars)
Reporting by Nikhil Kurian Nainan in Bengaluru; editing by Diane Craft, Jonathan Oatis and Jane Wardell
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