Australia’s Westpac sells car loan business to Cerberus

Adds details on the financial aspects of the agreement, background

June 28 (Reuters)Westpac Banking Corp. WBC.AX announced on Monday that it would sell its auto finance business to U.S. private equity firm Cerberus Capital Management for an undisclosed amount.

Australia’s second-biggest lender has shed assets over the past year to focus on its core banking operations after a series of scandals heightened regulatory scrutiny.

This is the second sale of one of its businesses to Cerberus, which last August acquired Westpac’s vendor finance business.

Westpac said it would transfer about A$1 billion ($759 million) in wholesale loans to Angle Finance, a Cerberus company.

The lender will generate an accounting gain on the sale, which is expected to add six basis points to its Tier 1 common equity capital, he said.

The latest sale comes as the Sydney-based bank plans to cut costs by around a fifth, including closing branches, as it focuses on bolstering its digital offering.

The announcement also comes days after Westpac decided to keep its New Zealand business after a review found a split would have been too costly.

($1 = 1.3184 Australian dollars)

(Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Kim Coghill and Stephen Coates)

(([email protected]; Twitter: @NikhilKurianN))

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