In a statement, Westpac said it had agreed with TAL to sell Westpac Life Insurance Services for $900 million and enter an exclusive 20-year alliance for the provision of life insurance products to Westpac’s Australian customers.
“The transaction sees Westpac exit manufacturing life insurance products and releases significant capital back to the bank”, Westpac said.
“The total accounting loss on sale is approximately $1.3 billion post-tax, while the transaction will add approximately 12 bps to Westpac’s Level 2 common equity tier 1 capital ratio.”
“This transaction is another step in simplifying the bank while continuing to help customers with their life insurance needs by partnering with TAL,” Westpac group chief executive of specialist businesses and group strategy Jason Yetton said.
“Life insurance is an important product for many Australians and this sale provides certainty for customers and new opportunities for our people with TAL.”
The bank said it would “retain responsibility for certain pre-completion matters and provide protection to TAL through a combination of provisions, warranties and indemnities”.
Seems like all the investment has been on shopping their businesses around for sale rather than investing in technology and BCP after Painanddrama finally came back online after a week.
Panorama next
No one will want to buy Pandora … Sorry, Panorama
Seems like a referral agreement that would be banned under the Code of Ethics. Guess the rules dont apply to banks???
here we go. Stop complaining and get on with it?
Spoken like a true non-client facing intermediary.
That is actually a good point.
I believe similar agreements exist between IOOF and the banks they bought wealth businesses from. (ANZ & NAB). IOOF has had similar agreements with credit unions for years. All worthy of further scrutiny by regulators.
More redundancies and loss of corporate memory, system failures and lack of competition coming up. BT had good risk products, BUT appalling adviser service. BT never thought and acted like an insurance company. Its death knell for me was the 25% upfront discount.
I will miss them badly. They were my favourite before the 25% discount and the appalling IP price rises.
Does this sale include BT Life, or just the Westpac branded life products?
Oh fear.
I wanted to write’Oh dear’ but the above is probably more accurate.
900 million equals 12 bips ?
On a $700 billion balance sheet which includes all loans.