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ANZ (ASX: ANZ) continues its sell-off of non-core businesses today with the sale of New Zealand-based asset finance company UDC Finance to Japan's Shinsei Bank for NZ$762 million (AUD$705 million).
The sale follows a previously announced review for UDC, and comes eight months after the sale of wealth pension and investments business OnePath to IOOF (ASX: IFL) for $825 million.
The transaction implies a 20 per cent premium to UDC's net tangible assets, and will provide $439 million of Level 2 Group CET1 capital at settlement.
ANZ highlights the sale - still subject to regulatory approval with completion expected in the second half of the year, will further strengthening its balance sheet position by releasing more than NZ$2 billion (AUD$1.85 billion) of funding provided by ANZ New Zealand.
ANZ Bank New Zealand CEO Antonia Watson describes the purchase as a significant vote of confidence in the New Zealand economy.
"With a strong outlook for infrastructure and agriculture projects as the New Zealand economy rebuilds post-Covid-19, there is a significant role for UDC Finance to play. As such, it needs an owner that can invest in and grow the business," she says.
"Shinsei Bank intends to preserve UDC's operations, retain UDC employees and provide long term capital to maintain and grow customer lending in New Zealand.
"The sale will also mean UDC Finance will continue to operate as an independent finance company and enhance competition in the asset finance market."
Shinsei Bank Group operates both asset financing and vehicle and consumer lending businesses similar to those of UDC within Japan and offshore.
"I am very excited that UDC will become a part of the Shinsei Bank Group, in line with our non-organic growth strategy in this business area," says Shinsei Bank CEO Hideyuki Kudo.
"In the Covid-19 'New Normal', we are confident that UDC, as part of Shinsei Bank Group, will continue to grow and contribute to the development of the New Zealand economy and help people and businesses in New Zealand with their financial needs.
"Based on UDC's long successful history, solid business base and efficient sales structure, UDC will be a major asset for the Shinsei Bank Group."
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