Australian Westpac to sell auto loan business to Cerberus

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BUTdetailed information about the financial aspects of the transaction, background

June 28 (Reuters)Westpac Banking Corp WBC.AX said on Monday it would sell its car financing business to US private equity firm Cerberus Capital Management for an undisclosed amount.

Australia’s second largest lender has dived assets over the past year to focus on its core banking operations after a series of scandals heightened regulatory oversight.

This is the second deal to sell one of its businesses to Cerberus, which bought Westpac’s finance business last August.

Westpac said it will transfer approximately A $ 1 billion ($ 759 million) in loans to Angle Finance’s wholesale dealers, Cerberus.

According to him, the lender will receive an accounting profit on the sale, which is expected to add six basis points to its Tier 1 common equity.

The latest deal comes as a Sydney bank plans to cut costs by about a fifth, including through branch closures as it focuses on expanding its digital offering.

The announcement also came a few days after Westpac decided to keep its New Zealand business after a review found the split would be too costly.

($ 1 = AU $ 1.3184)

(Reporting by Nikhil Kurian Ninan in Bangalore; editing by Kim Coghill and Stephen Coates)

((NikhilKurian.Nainan@thomsonreuters.com; Twitter: @NikhilKurianN))

The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.

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