Westpac has sold its 10.7 per cent stake in Zip Co, after teaming up with buy now, pay later rival Afterpay.
The big four bank offloaded 55.2 million shares to institutional investors on Thursday, at a price of $6.65 a share (around $367 million in total).
It stated that the decision to sell the Zip stake reflected its business simplification strategy and ensuring efficient use of capital.
The bank’s chief information officer Gary Thursby said the leadership team of Zip had done a “tremendous job” of growing the company and expanding globally.
Meanwhile Westpac has also partnered with Afterpay to roll out savings and transactions account for the buy now, pay later provider’s customers.
Afterpay will introduce savings accounts and cash flow tools, facilitated by Westpac’s digital banking platform, to its 3.3 million customers in the second quarter of next year.
“We are continuing to explore opportunities with Zip, including working to integrate their buy now pay later functionality into our mobile banking apps across Westpac and our regional bank brands,” Mr Thursby said.
“This would expand our offering to customers and broaden the customers Zip can reach.
“We are also working with Zip on other opportunities for consumer, business and corporate customers that we believe could be mutually beneficial, while continuing to develop our banking relationship with Zip.”
Speaking on the Afterpay partnership, Westpac chief executive Peter King said fintech innovation is “changing banking in important ways”, with the digital banking platform being part of a long-term strategy to respond to the trend and changing customer needs.
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].