Westpac will report an accounting loss of around A$1.3 billion after tax on the sale of its life insurance business.

The bank announced yesterday that it has entered into an agreement to sell Westpac Life Insurance Services to TAL Dai-ichi Life Australia Pty Ltd. TAL is a wholly owned subsidiary of Dai-ichi Life Group.

The agreement includes a 20-year strategic alliance for the provision of life insurance products to Westpac customers.

The sale price is $900 million and there will be additional ongoing payments to Westpac. The transaction will add 12 basis points to Westpac’s level 2 common equity tier 1 capital ratio.

Westpac said the transaction would be completed in the second half of 2022.

Westpac set up a “specialist business division” in May last year to take management responsibility for a number of low-return businesses out of its core banking areas and to review the future of those businesses.

Since then it has sold or announced the sale of general insurance, vendor finance, lenders mortgage insurance, auto finance, New Zealand life and Westpac Pacific (the sale of which has run into a bit of regulatory trouble in Papua New Guinea).