Westpac expects to make an after-tax gain of A$225 million and add eight basis points to its common equity tier 1 capital ratio from the sale of superannuation and asset management businesses.
The bank announced yesterday that it has entered into a heads of agreement with Mercer Australia to merge its BT personal and corporate super business with Mercer Super Trust and sell Advance Asset Management to Mercer Australia.
BT has $37.8 billion of super funds under administration at the end of March and Advance had $43.7 billion of funds under management.
Westpac said the sale of the BT business would result in a small loss and the sale of Advance result in a gain.
The bank has already taken a write-down on capitalised software and goodwill in the superannuation business.
Separation and transaction costs are expected to be around $80 million after tax and will be expensed in the September half.
Westpac specialist business chief executive Jason Yetton said in a statement that the bank had sold eight of the businesses put into the specialist business unit two years ago, with five of those transactions completed.
Still up for sale are Westpac Pacific and the bank’s investment platform business Panorama.
Westpac Pacific might be a hard one to get off the books. The bank had agreed to sell the business to Kina Securities but Papua New Guinea’s Independent Consumer and Competition Commission denied authorisation for sale.