Westpac to sell New Zealand life insurance arm for $281 million to Fidelity

FILE PHOTO: A pedestrian looks at his phone as he walks past a logo for Australia’s Westpac Banking Corp located outside a branch in central Sydney, Australia, November 5, 2018. REUTERS/David Gray/File Photo

(Reuters) – Westpac Banking Corp said on Tuesday it will sell its life insurance business in New Zealand to Fidelity Life for NZ$400 million ($280.84 million).

It marks the latest asset to be offloaded by Australia’s second-largest bank over the past year as it doubles down on its core banking operations after a series of scandals ramped up regulatory scrutiny.

“This transaction is the latest step in simplifying our business,” Chief Executive Officer Peter King said in a statement.

It is expected the deal will add 7 basis points to Westpac’s common equity tier 1 capital and result in a post-tax gain after it is completed by the end of 2021.

Fidelity, New Zealand’s largest locally-owned life insurer, will also enter an exclusive 15-year distribution deal with Westpac, the bank said.

Westpac Life New Zealand had annual in-force premiums of NZ$149 million as of the end of March, it said.

($1 = 1.4243 New Zealand dollars)

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