ANZ has announced the sale of its New Zealand asset finance business, UDC Finance, to Shinsei Bank Limited for NZ$762 million. This decision follows a strategic review aimed at simplifying ANZ's operations. The agreed purchase price is based on a price-to-book ratio of 1.2 times the net tangible assets, valued at NZ$637 million as of March 31, 2020.
The transaction is expected to provide approximately AUD$439 million of Level 2 Group CET1 capital upon settlement and will release over NZ$2 billion in funding previously provided by ANZ New Zealand, thereby strengthening its balance sheet.
Antonia Watson, CEO of ANZ Bank New Zealand, expressed that the acquisition by Shinsei Bank signifies strong confidence in the New Zealand economy. She stated, "With a strong outlook for infrastructure and agriculture projects as the New Zealand economy rebuilds post-Covid-19, there is a significant role for UDC Finance to play. As such, it needs an owner that can invest in and grow the business."
Shinsei Bank Group operates various financial services similar to those offered by UDC within Japan and internationally. The bank plans to maintain UDC's operations and staff while providing long-term capital for customer lending growth in New Zealand. Watson added that this move would allow UDC Finance to remain an independent entity and enhance competition in the market.
Hideyuki Kudo, CEO of Shinsei Bank, remarked on the acquisition: “I am very excited that UDC will become a part of the Shinsei Bank Group, in line with our non-organic growth strategy in this business area." He further emphasized their confidence in UDC's potential contribution to New Zealand’s economic development amid the Covid-19 ‘New Normal’.
Kudo also noted: “Based on UDC’s long successful history, solid business base and efficient sales structure, UDC will be a major asset for the Shinsei Bank Group.”
The completion of this sale is subject to regulatory approval and is anticipated to conclude in the second half of 2020.