ANZ Bank, one of the leading financial groups in New Zealand, has reportedly agreed to sell its asset finance business, UDC Finance, to Japan-based Shinsei Bank for USD 762 million.
As per sources familiar with the knowledge of the matter, the company’s move to sell UDC Finance followed a previously announced a strategic review and is line with its strategy to streamline its business. However, the company is planning to retain UDC’s employees and operations and maintain consumer lending in New Zealand.
Sources cite that deal is subject to regulatory approval and is expected to gain closure in the second half of this year. For the bank, the sale will release over USD 2 billion of funding which will help it to strengthen its balance sheet in New Zealand.
ANZ bank has been seeking to sell UDC for several years. The company previously called off a deal to sell finance business earlier for USD 660 million deals to Chinese conglomerate HNA after it was rejected by the Overseas Investment Office.
Speaking on the acquisition, Antonia Watson, Chief Executive of ANZ NZ stated that Shinsei Bank's acquisition was a noteworthy vote of confidence in the New Zealand economy. UDC would remain an independent finance firm and retain competition in the asset finance market, said Watson.
She further added that with a positive outlook for agriculture and infrastructure projects, UDC would play a pivotal role in rebuilding the New Zealand economy in the post-pandemic period.
For the record, UDC posted a total profit of USD 24.5m in the six months to 31 March, which decreased from USD 34.7million in 2019. The company holds advances and net loans worth USD 3. 437 billion. The sale price indicates a price-to-book ratio of 1.2 times the company’s net tangible assets, which were worth USD 637m on March 31.
Hideyuki Kudo, Chief Executive of Shinsei Bank said that as the society adapted to a COVID-19 as new normal, UDC would continue to support the economy of New Zealand and support people and businesses in the nation with their financial needs.
Source Credit - https://www.stuff.co.nz/business/121695307/anz-sells-udc-finance-to-japans-shinsei-bank