Westpac insurance tipped to be first on block

Analysts estimate Westpac’s wealth platform could be worth between $700m and $1bn. Picture: AAP

Westpac’s general insurance operation is expected to be the first major asset in its portfolio of non-core assets to be placed on the block, according to sources.

Earlier this year, the bank appointed Jason Yetton to oversee its recently formed Specialist Businesses unit, which comprises assets many suspect will be sold.

Work is already said to be under way preparing the general insurance operation for a divestment, with some suggesting that investment bank UBS is a logical candidate to act as an adviser on a sale, given that it has carried out work for Westpac before, although Macquarie Capital is said to have been pitching for the work.

As earlier reported by this column, QBE is believed to be keen on CBA and Westpac general insurance operations, collectively worth about $1.7bn.

Some estimate that the CBA operation could be worth about $1bn, while the Westpac division may yield about $700m.

Also looking at the business is thought to be listed insurer IAG and Allianz.

Banks have been looking to divest non-core operations for some time as part of a trend towards simplifying their businesses following the royal commission into banking.

A board meeting was said to have happened around now to determine a plan for a selldown by Westpac of more than $4bn worth of non-core assets.

Operations identified as non-core for the bank include its $15bn dealer finance and auto loans portfolio, which some expect could fetch as much as $2bn, its BT Panorama wealth management operation, its Pacific Bank, its general insurance division and it $1.5bn life insurance operation, which has already been up for sale through JPMorgan.

Analysts estimate Westpac’s wealth platform could be worth between $700m and $1bn.