Last week it kept its New Zealand banking business, on Monday Westpac revealed it was quitting its Australian car finance businesses.
Westpac told the ASX it was selling its motor vehicle dealer finance and novated leasing businesses to non-bank financial group Angle Finance.
Westpac didn’t give a figure for any profit on the sale except to say that “an accounting gain on sale” will be made and will help increase its tier 1 capital by six basis points.
Angle is part of US private equity giant, Cerberus Capital Management and will purchase Westpac’s auto dealer and introducer agreements, together with wholesale dealer loans of approximately $1 billion.
Westpac said it will retain its existing retail auto loans of around $10 billion originated by the businesses being transferred.
These loans will run down in the normal course of business over the life of those loans (three to five years generally).
Westpac says it will also progressively cease new retail auto loan originations from these three channels, though it said customers will still be able to use its consumer and business lending products to help buy motor vehicles.
“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 of specialist businesses 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.”
