Westpac Banking Corporation (ASX: WBC) is reportedly nearing D-day for the sale of its Australian and New Zealand life insurance businesses.
The bank’s share price appears to have gotten caught up in today’s market weakness. At the time of writing, the Westpac share price is trading 0.7% lower at $25.70.
Let’s unpack the latest divestment development coverage.
Westpac’s life insurance offload looms
According to The Australian, Westpac could hand off its Australian and New Zealand life insurance units within the coming weeks in two separate deals.
JPMorgan is said to be conducting the auction of both units. Word on the street is the NZ auction is nearing a close. The sale might see the bank’s Kiwi life business fetch as much as $465 million.
It is believed that NZ’s Fidelity Life, Partners Life, and TAL are in the race for the New Zealand operations.
Closer to home, final bids for Westpac’s Australian life insurance unit were taken on Friday. The estimated $1.78 billion division is rumoured to have received binding offers from Resolution and TAL.
Life insurance is no easy money
Australia’s second-biggest bank has taken a page out of its ASX-listed peer’s book. Westpac is the last of the big four to wave goodbye to life insurance.
Additionally, the planned sale follows a significant fall in premiums year-over-year. In its second half FY20, Westpac wrote down roughly $406 million of the life division.
Some analysts had also been forecasting further writedowns over the proceeding 12 months.
Westpac’s leaner ASX-listed bank mission
Westpac’s divestment spree is a part of a bigger cost-reduction plan led by chief executive officer Peter King. The ambition is to cut costs by nearly 40% in four years by removing specialist businesses.
Such divisions include its general insurance operations, which has been auctioned off to Allianz. Additionally, the bank’s Pacific operations has been sold to Kina Securities Ltd (ASX: KSL).
More recently, the entire New Zealand Westpac division was up for consideration. However, the bank decided to retain its Kiwi banking operations.