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Westpac (ASX: WBC) has successfully completed the sale of its general insurance business to Allianz for $725 million today, bagging a $61 million gain in the process.
The sale, announced in December last year, sees the big four bank divest Westpac General insurance Limited and Westpac General insurance Services Limited to Allianz.
In addition, the two have entered into an exclusive 20-year agreement for the distribution of general insurance products to Westpac's customers.
The bank expects to report a gain on sale of approximately $61 million, subject to finalisation of completion adjustments and separation costs that will be included in the company's FY21 results.
"We have successfully executed a transition that helps our customers protect the things they value through a long-term partnership with a global insurance expert and helps us become a simpler bank," Westpac chief executive specialist businesses & group strategy Jason Yetton said.
It comes just over a week after Commonwealth Bank (ASX: CBA) announced it is planning on divesting its insurance business to South African-owned insurance multinational Hollard Group for $625 million in upfront considerations.
The partnership with Hollard means the new owners will still distribute home and motor vehicle insurance products to CBA's retail customers in Australia, with the agreement also including a commitment from both parties to make investments to drive innovation and enhance the customer experience.
CBA will continue to earn income on the distribution of these insurance products and is expecting a $90 million post-tax gain from the transaction, as well as an increase of approximately $400 million of Common Equity Tier 1 (CET1) capital.
Shares in WBC are down 0.46 per cent to $25.69 per share at 11.46am AEST.
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