Liberty Financial, TPG team in pole position for Westpac auto finance sale

Liberty Financial and partner private equity firm TPG are firming as frontrunner to snap up Westpac’s auto finance business.

Westpac has earmarked a number of businesses for sale, including its auto finance division. Picture: NCA NewsWire / Christian Gilles

ASX-listed lender Liberty Financial and partner private equity firm TPG are firming as the frontrunner to buy Westpac’s auto finance business.

The Australian understands the sale process for the bank’s auto loan unit is in the final furlong and is most advanced in Westpac’s divestment pipeline in its specialist division. Sources said The Carlyle Group was still around the Westpac auto finance process, but Liberty was considered at the front of the pack.

The Westpac specialist unit is run by Jason Yetton and is also seeking to offload bank businesses including its life insurance division and investment platform and superannuation arms.

Westpac is understood to be focused on retaining the bulk of the existing $11.1bn auto finance business book, with the sale process largely centring on the ability for a buyer to sell new loans. The sale also includes the relationship with car distributors.

Liberty listed on the ASX last year and has a market capitalisation of $2.2bn. The size of any purchase would also depend on how much TPG tips into a transaction, which has yet to be formally signed off.

Other private equity firms that were linked to the Westpac auto loans sale separately include Bain Capital Credit, KKR & Co and Cerberus. Some of those firms had partnered with non-bank lenders to pursue the Westpac portfolio.

Dataroom in March reported that as many as 36 parties had signed nondisclosure agreements to enter Westpac’s transaction data room for the auto loan sale.

Morgan Stanley is running the auction process on behalf of Westpac.