NAB to Sell Life-Insurance Unit
28 Outubro 2015 - 3:00AM
Dow Jones News
MELBOURNE, Australia—National Australia Bank Ltd. has agreed to
a 2.4 billion Australian-dollar (US$1.74 billion) deal to sell
control of its life-insurance business to Japan's Nippon Life
Insurance Co., as it seeks to focus on core operations in Australia
and New Zealand.
The lender said it would push ahead with an exit from its U.K.
banking business, spinning most it off to shareholders and floating
the rest early next year.
The moves are part of NAB's efforts to move on from businesses
that have held it back in recent years, with returns that
underperform Australia's other top banks. Still, the lender
reported record profit in the just-ended financial year, helped by
higher mortgage and business lending and a lower bad-debt
charge.
NAB said Wednesday it will sell an 80% interest in its
life-insurance business to Nippon Life, and has entered a 20-year
partnership with the Japanese insurer. It will hold on to a 20%
stake, as well as its investment operations, including
superannuation pension platforms and asset management that form
part of NAB's wealth division.
The sale is expected to result in a loss of about A$1.1 billion,
including separation costs, although the bank will lift its key
capital adequacy ratio by 0.5 percentage point at a time when
regulators are looking closely at banks' capital buffers.
The sale comes amid consolidation among insurers in the
Asia-Pacific region. Nippon Life last month agreed to buy smaller
Mitsui Life Insurance Co. A month earlier, Sumitomo Life Insurance
Co. agreed to purchase U.S. life insurer Symetra Financial Corp.
for US$3.73 billion. And earlier this year, Dai-ichi Life Insurance
Co. closed a deal to buy Protective Life Corp. in the U.S. for
US$5.6 billion.
Further tightening its concentration on Australia and New
Zealand, NAB said it was aiming to spin off about 75% of its
Clydesdale division in the U.K. to shareholders and sell the rest
to institutional investors through an initial public offering
planned for February.
The CYBG PLC business will have a primary listing on the London
Stock Exchange, although it will need approval from shareholders in
a vote set for January.
Since taking over as chief executive in August, Andrew Thorburn
has moved to tighten the bank's focus on more profitable core
operations. That has included floating its regional U.S. bank Great
Western Bancorp Inc., and raising A$5.5 billion in a rights issue
earlier this year to bolster capital buffers and cover against
potential losses related to legacy misconduct allegations for
wrongly selling certain U.K. financial products.
"We have been focused on delivering against our plan, driving
improved performance in our Australian and New Zealand business,
investing for growth, delivering significant technology milestones
for our customers, building a stronger balance sheet and exiting
our legacy and lower returning assets," Mr. Thorburn said.
Separately, NAB reported an all-time high net profit of A$6.34
billion in the year to Sept. 30 against A$5.3 billion the year
before.
Cash earnings—a figure followed by analysts that strips out
certain income and costs—jumped 16% to A$5.84 billion, which NAB
said reflected a 4% rise in revenue and a 1% fall in expenses. A
year earlier, cash earnings were held back by A$1.5 billion in U.K.
conduct-related provisions and write-downs for the carrying value
of software assets.
NAB said its charges for bad and doubtful debt were A$823
million, down about 5% thanks to lower charges in Australian and
U.K. banking. Still, net interest margin—a profit measure based on
the difference between the rate at which a bank borrows and
lends—narrowed by 4 basis points on year to 1.87%, due partly to
competition in Australian business and housing lending.
"In 2016, our business will be stronger and more focused on
delivering for our customers and our shareholders," he said.
The bank said it plans to pay a final dividend of A$0.99 a
share, the same as last year, for a full-year payout of A$1.98.
Write to Robb M. Stewart at robb.stewart@wsj.com
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(END) Dow Jones Newswires
October 28, 2015 00:45 ET (04:45 GMT)
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