FILE PHOTO: 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/File Photo
(Reuters) -Australia’s No.2 lender Westpac Banking (NYSE:WBK) Corp said on Monday it is selling its domestic life insurance business to Japan’s Dai-ichi Life Holdings for A$900 million ($660 million), as part of efforts to focus on its core businesses.
Westpac has sold several units in the last two years as it cuts costs and doubles down on banking operations following a series of scandals that ramped up regulatory scrutiny.
For Dai-ichi, the deal provides another avenue to boost its overseas business as Japan grapples with a declining population. The company bought Suncorp Group Ltd’s Australian life insurance business for A$640 million in 2018.
Westpac said it expects an after-tax accounting loss of about A$1.3 billion on the sale, while the deal will add about 12 basis points to its level 2 common equity tier 1 capital ratio.
The sale is expected to be completed in the second half of 2022.
The lender also said it signed an exclusive 20-year deal with Dai-ichi’s local unit, which insures more than 4.5 million Australians, to sell life insurance products to Westpac’s customers.
($1 = 1.3637 Australian dollars)