ANZ to sell NZ asset finance business

The purchaser, Shinsei Bank Group, is a diversified financial group operating asset financing as well as vehicle and consumer lending businesses (similar to those of UDC), within Japan and offshore.

The sale reportedly follows a strategic review of UDC Finance in New Zealand and is “in line with ANZ’s strategy to simplify its business”.

According to the bank, the purchase price represents a price-to-book ratio of 1.2x net tangible assets of NZ$637 million ($590 million) as at 31 March 2020.

Further, the sale provides approximately $439 million (~10 bps) of level 2 group CET1 capital at settlement, and will release more than NZ$2 billion ($1.85 billion) of funding provided by ANZ New Zealand.

ANZ Bank New Zealand CEO Antonia Watson said the purchase of UDC Finance by Shinsei Bank is a significant vote of confidence in the New Zealand economy.

The UDC sale is subject to regulatory approval, and completion is expected in the second half of the 2020 calendar year.

“With a strong outlook for infrastructure and agriculture projects as the New Zealand economy rebuilds post-COVID-19, there is a significant role for UDC Finance to play. As such, it needs an owner that can invest in and grow the business.”

“Shinsei Bank intends to preserve UDC’s operations, retain UDC employees and provide long-term capital to maintain and grow customer lending in New Zealand. The sale will also mean UDC Finance will continue to operate as an independent finance company and enhance competition in the asset finance market,” Ms Watson said.

Shinsei Bank CEO Hideyuki Kudo added: “I am very excited that UDC will become a part of the Shinsei Bank Group, in line with our non-organic growth strategy in this business area. In the COVID-19 ‘new normal’, we are confident that UDC, as part of Shinsei Bank Group, will continue to grow and contribute to the development of the New Zealand economy and help people and businesses in New Zealand with their financial needs.

“Based on UDC’s long successful history, solid business base and efficient sales structure, UDC will be a major asset for the Shinsei Bank Group,” Mr Kudo said.

This is ANZ’s second attempt to sell its asset finance subsidiary, after its first sale attempt, with Chinese conglomerate HNA Group, was blocked by the New Zealand Overseas Investment Office in late 2017.

Later, in 2018, the bank considered floating UDC Finance but decided against the move following its strategic review into the business. At this time, then ANZ New Zealand CEO David Hisco stated that a future sale of the business would continue to be considered.

[Related: ANZ defers $36bn in mortgages, prepares for loss]