The sale is in line with ANZ’s plan to simplify its business, following a strategic review by its NZ Bank.
The transaction will provide around $439 million of Level 2 Group CET1 capital at settlement as well as release NZ$2 billion ($1.8 billion) of funding provided by ANZ New Zealand.
ANZ Bank NZ chief executive Antonia Watson said the purchase of UDC Finance by Shinsei Bank is a significant vote of confidence in the NZ economy.
“With a strong outlook for infrastructure and agriculture projects as the New Zealand economy rebuilds post-COVID-19, there is a significant role for UDC Finance to play,” Ms Watson said.
“As such, it needs an owner that can invest in and grow the business.”
Shinsei Bank Group operates both asset financing and vehicle and consumer lending businesses similar to those of UDC within Japan and offshore.
“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,” Ms Watson said.
“The sale will also mean UDC Finance will continue to operate as an independent finance company and enhance competition in the asset finance market.”
Shinsei Bank CEO Hideyuki Kudo said the acquisition is in line with his company’s non-organic growth strategy in asset financing.
“In the COVID-19 ‘new normal’, we are confident that UDC, as part of Shinsei Bank Group, will continue to grow and contribute to the development of the New Zealand economy and will help people and businesses in New Zealand with their financial needs,” Mr Kudo said.
“Based on UDC’s long successful history, solid business base and efficient sales structure, UDC will be a major asset for the Shinsei Bank Group.”
The UDC sale is subject to regulatory approval and completion is expected in the second half of the year.
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].