Westpac books $1.37b loss on sale of Westpac Life

Westpac has confirmed the sale of its Westpac Life Insurance Services business to major insurer TAL resulted in the bank booking a total after tax loss on the sale of approximately $1.37 billion.

The transaction was announced in August last year and Westpac announced it had been completed today.

The announcement said Westpac expected to report a total after tax loss on the sale of approximately $1.37 billion of which $0.27 billion was incurred in the Group’s Financial Year 2021 results.

It said that in the Group’s Financial Year 2022 results, a loss of approximately $1.10 billion after tax would be classified as a notable item and primarily relates to the difference between the sale proceeds of $900 million and the carrying value of net assets in the business.

However it said that completion of the transaction adds approximately 17 basis points to Westpac’s common equity Tier 1 capital ratio and that, in addition, Westpac would receive ongoing payments under an exclusive 20-year strategic alliance for the provision of insurance products to Westpac’s Australian customers.

Westpac Specialist Businesses chief executive, Jason Yetton said the sale was another important step in simplifying the business.

“We have now completed Westpac’s exit of insurance underwriting following the sales of our General Insurance and Lenders Mortgage Insurance businesses in Australia, as well as Life Insurance in New Zealand,” he said.