Westpac Group's (ASX: WBC) vendor finance business will be sold to Angle Finance, a portfolio company of US private equity firm Cerberus Capital Management.
Given the size of the portfolio, which Westpac describes as "modest", the sale is expected to have a negligible impact on the bank's balance sheet and capital ratios.
However, the transaction is expected to result in the transfer of around $500 million of customer loans.
Westpac chief executive of specialist businesses Jason Yetton says the sale of the subsidiary, which supports third parties to fund small ticket equipment finance loans to around 42,000 businesses, will open up new opportunities for its customers.
"The sale represents the first transaction of the Group's simplification initiatives and brings certainty for vendor finance customers and new opportunities for our people," says Yetton.
Completion of the transaction is expected to occur at the end of April 2021.
Business News Australia
Get our daily business news
Sign up to our free email news updates.