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Reuters

Westpac Banking, Australia’s second-biggest bank by market capitalisation, said on Friday it had agreed to buy Australian assets from Lloyds Banking for A$1.45 billion (HK$10.6 billion).
The deal, Westpac’s largest acquisition since its 2008 takeover of St George Bank, will extend the Australian lender’s reach in motor vehicle finance, equipment finance and corporate lending.
The asset sale had been viewed as an opportunity to pick up assets on the cheap, at a time when Lloyds is refocusing on its operations in Britain.
“This is a value-creating, straightforward transaction that makes both commercial and strategic sense,” Westpac chief executive Gail Kelly said in a statement.
“These are strongly performing businesses that we know well and that will expand our reach and capability in target segments.”
Westpac said full-year earnings per share next year would benefit, but it did not quantify the improvement. The internally funded deal will add A$100 million to cash earnings by 2015, the bank said.

	These are strongly performing businesses that we know well and that will expand our reach and capability in target segments

	Westpac chief executive Gail Kelly
Westpac won the auction after rivals Macquarie and a consortium led by Pepper Australia and GE Capital dropped out of the race.
The corporate loan book, motor and equipment financing businesses purchased by Westpac have a face value of A$8.4 billion, the Australian bank said.
Westpac said it did not require regulatory approvals for the deal, which it expected to complete by the end of the year. It said it was co-operating with an informal merger review by the Australian competition regulator.
Given Westpac’s size in the Australian market, the deal had been expected to attract attention on competition grounds.
The sale was part of Lloyds’ global strategy to cut costs and shrink its international network to refocus on lending in the British domestic market.


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Lloyds Banking Group

Westpac buys A$1.45 billion in Australian assets from Lloyds Banking 

Westpac is picking up the assets cheaply, as the vendor is refocusing on its home base, Britain. Photo: AFP

Business

Banking & Finance