Westpac (ASX:WBC) sells Life Insurance business to TAL Dai-ichi - Kalkine Media

August 01, 2022 11:45 AM AEST | By Khushboo Joshi
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Highlights:

  • Westpac has finally sold its life insurance services business to well-known group - TAL Dai-ichi - for AU$900 million.
  • The bank had announced this deal in August 2021. 
  • Westpac is most likely to report a total after tax loss of AU$1.37 billion post this sale.
  • TAL is a 100%-owned subsidiary of the well-known Dai-ichi Life Group.

One of the four ‘Big Banks’ of Australia, Westpac Banking Corporation (ASX:WBC), announced on 1 August 2022, that it has accomplished selling its life insurance business – Westpac Life Insurance Services Limited - to TAL Dai-ichi Life Australia Pty Limited.

This transaction was declared on 9 August 2021.

The shares of Westpac, after the announcement, were spotted trading flat at AU$21.510 apiece at 11:10 AM AEST.

 

Details of the transaction:

  • The sale price stands at AU$900 million. The transaction features ongoing payments to Westpac.
  • Westpac is likely to report AU$1.37 billion of total after tax loss on this business sale.
  • Out of this AU$1.37 billion, AU$0.27 billion was reported in the FY2021 financial results of the company.
  • In FY2022 financial results, WBC will be classifying a loss of around AU$1.10 billion after tax.
  • After the completion of this sale, around 17 basis points will be added to Westpac’s common equity Tier 1 Capital ratio.
  • Also, Westpac will be getting ongoing payments under an exclusive 20-year strategic partnership for providing life insurance products to WBC’s Aussie customers.
  • Westpac will still be responsible for providing protection to TAL via some provisions, warranties and indemnities.

Image Source - © Provodnik | Megapixl.com

About TAL

TAL is a fully owned unit of the well-known Dai-ichi Life Group. TAL is already providing insurance products to more than 4.5 million people in Australia.  

 

 Westpac in other news

The banking firm announced last week that it will be offering 10-minute approval mortgage as it is looking out for a surge in refinancing sector.

Peter King, Chief Executive, Westpac, had said that a technology revamp will allow the banking firm to approve digital mortgages application in minutes. This suggests that Westpac is preparing to shift towards a digital banking future.

Westpac’s share performance on ASX

In past five trading days, WBC shares have gained 1.51%, while in the month of July, the stock has moved up 10.71%. In last one year, the shares have gone down over 14% while on year-to-date basis, the stock is marginally, 0.74% lower as of today (11:17 AM AEST).   


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