The Westpac Banking Corp (ASX: WBC) share price is in negative territory on Tuesday morning. This comes after the banking giant announced an update to the sale of one of its finance businesses.
At the time of writing, the bank's shares are fetching $24.85, down 0.72%. In comparison, the S&P/ASX 200 Index (ASX: XJO) is sitting at 7,472 points, down 0.25%.
Westpac sells vendor finance business
According to the release, Westpac has completed the sale of its vendor finance business, Strategic Alliances, to Angle Finance.
Strategic Alliances supports third parties to fund small-ticket equipment finance loans for approximately 42,000 Australian businesses.
Based in Melbourne, Angle Finance is a non-bank asset finance company that services small and medium-sized enterprises. The business specialises in offering equipment finance of up to $200,000 for transport, construction, materials handling, and earthmoving equipment.
The transaction resulted in the transfer of roughly $500 million in customer loans to Angle Finance. However, the size of the portfolio means the sale will have little impact on Westpac's balance sheet and capital ratios.
Westpac realised a small accounting loss on the sale in FY20. This was due to the transaction being structured with an initial payment on completion, followed by a deferred consideration payable over a two-year period.
Westpac also recently sold its vehicle dealer finance business to Angle Finance. This also resulted in a fall in the Westpac share price.
The vendor finance business previously operated out of Westpac subsidiary, Capital Finance Australia. Despite the sale, the bank will continue managing its remaining Capital Finance Australia equipment finance business.
Westpac chief executive of specialist businesses and group strategy Jason Yetton commented:
Westpac is pleased to have successfully executed the transaction which will help Australian businesses continue to finance small-ticket equipment loans to grow and be successful and help us become a simpler bank.
About the Westpac share price
Over the past 12 months, Westpac shares have accelerated by more than 50%, with year-to-date gains almost at 30%. The company's share price reached a 52-week high of $27.12 in June, before slightly treading lower.
Westpac commands a market capitalisation of roughly $91.8 billion, and has over 3.6 billion shares on its registry.
