The big four bank has confirmed its sale of its motor vehicle dealer finance and novated leasing businesses to a non-bank asset finance lender.
Westpac has confirmed that it will sell its motor vehicle dealer finance and novated leasing businesses to Angle Finance, a portfolio company of Cerberus Capital Management.
Westpac’s Auto Finance businesses comprises retail auto loans originated through more than 250 auto dealer groups, strategic alliance agreements with three major vehicle manufacturers, wholesale dealer loans provided to dealers in the form of bailment and other facilities and a novated leasing business
The sale includes approximately $1 billion of auto dealer and introducer agreements, together with wholesale dealer loans, as well as strategic alliance agreements with vehicle manufacturers and “novated lease origination capability and related agreements”.
Westpac will retain approximately $10 billion of its existing retail auto loans that were originated by the businesses which are being transferred. The loans will run down in the normal course of business over the life of those loans.
Westpac said it will also progressively cease new retail auto loan originations from these three channels, but customers will still be able to use the group’s consumer and business lending products to help buy motor vehicles.
The sale, which is expected to complete by the end of calendar year, is subject to the final value of the portfolio transferred and is expected to generate “an accounting gain” on sale. The transfer will then occur over “several stages to allow for a smooth transition”.
Once complete, the business will operate as Angle Auto Finance, which works closely with the broker market.
“This sale brings certainty for our customers, new opportunities for our people and continues the progress we are making on becoming a simpler bank,” said Westpac Group chief executive, specialist businesses and group strategy, Jason Yetton.
“Angle Auto Finance is committed to the Auto Finance industry and will provide the capability and strategic focus to grow and improve the business,” said Mr Yetton.
Westpac last year entered into an agreement to sell its Vendor Finance asset finance subsidiary to Angle Finance.