In a statement, Westpac said it had agreed with TAL to sell Westpac Life Insurance Services for $900 million and enter an exclusive 20-year alliance for the provision of life insurance products to Westpac’s Australian customers.
“The transaction sees Westpac exit manufacturing life insurance products and releases significant capital back to the bank,” Westpac said.
“The total accounting loss on sale is approximately $1.3 billion post-tax, while the transaction will add approximately 12 bps to Westpac’s Level 2 common equity tier 1 capital ratio.”
“This transaction is another step in simplifying the bank while continuing to help customers with their life insurance needs by partnering with TAL,” Westpac group chief executive of specialist businesses and group strategy Jason Yetton said.
“Life insurance is an important product for many Australians and this sale provides certainty for customers and new opportunities for our people with TAL.”
The bank said it would “retain responsibility for certain pre-completion matters and provide protection to TAL through a combination of provisions, warranties and indemnities”.