By Alice Uribe
SYDNEY--Westpac Banking Corp. will sell its lenders mortgage insurance unit to Arch Capital Group, and has made plans for a long-term supply partnership with it.
The Australian bank on Thursday said the sale of Westpac Lenders Mortgage Insurance Ltd. would be at book value, which will be determined at completion. It added the transaction includes small, fixed annual payments to Westpac over the next 10 years.
"The sale continues the simplification of our business and builds on our progress in becoming a simpler, stronger bank focussed on consumer, business and institutional banking," said Jason Yetton. Westpac's chief executive of Specialist Businesses and Group Strategy.
As part of a 10-year exclusive supply agreement, Arch will provide lenders mortgage insurance to Westpac, the lender said.
Westpac said it will record a loss on sale in the 2021 fiscal year from separation and transaction costs along with a 84 million Australian dollars (US$65.68 million) write-down of goodwill that was announced with its first-quarter update.
Completion of the transaction is subject to various regulatory approvals and is expected to occur by the end of August.
Write to Alice Uribe at firstname.lastname@example.org
(END) Dow Jones Newswires
March 17, 2021 20:39 ET (00:39 GMT)Copyright (c) 2021 Dow Jones & Company, Inc.