Westpac to Move Forward With Life Insurance Unit Sale

Westpac Banking Corp. is working with JPMorgan Chase & Co. as it prepares to kick off a formal sale process for its life insurance business as soon as this month, according to people with knowledge of the matter.

AIA Group Ltd., Dai-ichi Life Holdings Inc. and Meiji Yasuda Life Insurance Co. are among the firms that have been approached to gauge their potential interest in the unit, one of the people said.

Deliberations are ongoing and Westpac could decide to keep the business, the people said. Representatives for AIA, Dai-ichi Life, Meiji Yasuda, JPMorgan and Westpac declined to comment.

Westpac may seek a premium to the unit’s net asset value of A$1.8 billion ($1.4 billion), though how much it will be able to fetch depends on the buyers’ interest. Earnings for the life insurance business are likely to remain under pressure this year, Westpac told investors in November. The business line posted A$229 million in income in the 2020 financial year before write-downs.

The Sydney-based bank pledged to shed non-core assets and focus on banking in Australia after a series of scandals led to a record A$1.3 billion fine in September to settle the country’s biggest breach of anti-money laundering laws. Since then, Westpac has sold its general insurance business to Germany’s Allianz SE for A$725 million and its Pacific unit to Kina Securities Ltd. for as much as A$420 million.

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