In a week when Westpac has announced its new chief executive as ex investment banker Anthony Miller, there’s some talk in the market that the lender’s auto loan back book sale may have stumbled.
Working on the divestment is investment bank Citi and the understanding is that it’s all come to a bit of a halt for now.
Most suspect the likely explanation is that it’s been more challenging than the bank anticipated separating the loans from the business.
The assets have recently been placed on the block after Westpac in 2021 announced a sale of its motor vehicle dealer finance and novated leasing business to Cerberus Capital Management’s Angle Finance.
The private equity firm was to pick up auto dealer and wholesale loans worth about $1bn, its strategic alliance agreements with vehicle manufacturers, and Novated lease origination capability and related agreements.
However, it retained its existing retail auto loans of around $10bn originated by the businesses being offloaded.
The bank would progressively stop writing new business for auto loans, with customers instead able to use the bank’s Consumer and Business lending products to help buy motor vehicles.
It was understood back then around the industry is that Westpac would have sold the entire unit but parts were difficult to shift from its systems. It was believed Westpac reaped about $400m from the sale.
Sources believe that it is most likely the case that many of the loans have run their course.
The sale came as part of a number of non-core businesses divested by the lender in recent years, including Westpac’s general insurance unit to Allianz for about $700m and its life insurance business to Japan’s Dai-ichi for $900m.
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