NAB Says A$1.44 Billion Wealth Sale Frees It to Focus on Core Businesses
By Alice Uribe
SYDNEY--National Australia Bank Ltd. said the sale of its MLC
Wealth unit to IOOF Holdings Ltd. for 1.44 billion Australian
dollars (US$1.06 billion) will allow it to focus on its core
NAB Chief Executive Ross McEwan said the divestment would free
Australia's third largest lender by market size to invest elsewhere
and focus on delivering a simpler, more streamlined
NAB said it will receive A$1.24 billion in cash and A$200
million in the form of a 5-year structured subordinated note in
IOOF, which it said would allow it to benefit from any medium-term
value created through the combination of MLC and IOOF.
In addition, NAB also said it expected to receive approximately
A$220 million of surplus cash from MLC in the form of a
NAB anticipates its Core Equity Tier 1 capital will increase by
approximately 30 basis points following the sale, resulting in a
pro forma CET1 ratio of approximately 11.9%.
The transaction is estimated to result in a post-tax loss of
approximately A$400 million, which includes estimated post-tax
separation and transaction costs of approximately A$200 million,
The transaction includes MLC's advice, platforms, superannuation
and investments and asset management businesses. NAB said it will
retain legal ownership of MLC's advice entities, for the purpose of
completing advice-related remediation programs.
Australia's major banks have largely been casting off their
advice businesses in the wake of the country's royal commission
into the sector which uncovered a range of misconduct and prompted
billions of dollars in remediation.
Write to Alice Uribe at email@example.com
(END) Dow Jones Newswires
August 30, 2020 20:51 ET (00:51 GMT)
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