Westpac today announced that it will sell its motor vehicle dealer finance and novated leasing businesses to Angle Finance, a portfolio company of Cerberus Capital Management, L.P1.
As part of the sale, Westpac will transfer:
- Auto dealer and introducer agreements together with wholesale dealer loans of approximately $1 billion;
- Strategic alliance agreements with vehicle manufacturers; and
- Novated lease origination capability and related agreements.
Westpac will retain its existing retail auto loans of around $10 billion originated by the businesses being transferred. The loans will run down in the normal course of business over the life of those loans. Westpac will also progressively cease new retail auto loan originations from these three channels with customers still able to use the Group's Consumer and Business lending products to help buy motor vehicles.
The sale is subject to the final value of the portfolio transferred and will generate an accounting gain on sale. It is expected to add around 6 basis points to Westpac's common equity tier 1 capital ratio2.
"This sale brings certainty for our customers, new opportunities for our people and continues the progress we are making on becoming a simpler bank," said Westpac Group Chief Executive, Specialist Businesses & Group Strategy, Jason Yetton.
"Angle Auto Finance is committed to the Auto Finance industry and will provide the capability and strategic focus to grow and improve the business," said Mr Yetton.
Completion is expected by the end of the calendar year with the transfer to occur over several stages to allow for a smooth transition. Completion of the transaction is subject to regulatory approvals.
