The Westpac Banking Corp (ASX: WBC) share price will be one to watch on Tuesday.
This follows the announcement of yet another asset sale this morning.
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What did Westpac announce?
This morning Westpac announced that it has signed an agreement with Fidelity Life Assurance Company for the sale of the bank's Westpac Life NZ business. Fidelity Life Assurance Company is New Zealand's largest locally owned life insurer, backed by cornerstone investor the NZ Super Fund.
According to the release, the two parties have agreed a sale price of NZ$400 million (approximately A$373 million) for the business. Westpac and Fidelity have also entered into an exclusive 15 year agreement for the distribution of life insurance products to Westpac's New Zealand customers.
Westpac advised that the sale price of NZ$400 million is expected to result in a post-tax gain on sale and add approximately 7 basis points to its group common equity tier 1 capital ratio. The transaction will also include ongoing payments from the distribution agreement to Westpac New Zealand.
Westpac's Chief Executive Officer, Peter King, believes the sale of the Westpac Life NZ business is another milestone in its quest to build a simpler bank.
Mr King said: "This transaction is the latest step in simplifying our business while continuing to help customers with their life insurance needs. Life insurance products are important for many New Zealanders and we are pleased to be entering a long-term partnership with a life insurance specialist to continue to help our customers protect themselves and their loved ones."
Completion of the transaction is subject to various approvals and is expected to occur by the end of 2021.
The Westpac share price has been a strong performer in 2021. Since the start of the year, the banking giant's shares have risen an impressive 30%.
