National Australia Bank Limited today announced completion of the sale of 80% of its life insurance business to Nippon Life Insurance Company (Nippon Life) for $2.4 billion.
As previously advised, NAB will retain ownership of 20%of the new life insurance business, and retain full ownership of the existing investments business which includes superannuation, platforms, advice and asset management.
The financial details of the sale will be finalised and reported with the FY16 Full Year Results on 27 October 2016. The key details relating to the transaction are materially consistent with those outlined in the FY15 Full Year Results ASX announcement and Investor Presentation and include:
• Following completion, the transaction is expected to deliver an increase of approximately 50 basis points to NAB’s CET1 capital ratio.
• Goodwill for the Wealth business is expected to reduce by approximately $1.6-$1.7 billion.
• The transaction has resulted in a loss on sale, which is expected to be approximately $1.2-$1.3 billion.
• NAB will retain the MLC brand, although it will be licensed for use by MLC Life Insurance for 10 years and will continue to be used (as is currently the case) in NAB’s superannuation, investments and advice business.As part of the sale, NAB is also today commencing a long term partnership with Nippon Life which includes a 20 year distribution agreement to provide life insurance products through NAB’s owned and aligned distribution networks.
NAB Group CEO Andrew Thorburn: “From today we move forward with a simpler, clearer wealth model designed to serve our customers better – with continued ability to offer leading life insurance products and services. “We have also streamlined our superannuation business, merging five super funds into one to create Australia’s largest retail super fund. This simplifies our superannuation business, which NAB will retain, and over time makes it easier for customers to access various products and features within the fund as their needs change. NAB has also committed additional investment of at least $300 million over the next four years in our superannuation, platform, advice and asset management business. The combination of these initiatives will allow us to deliver a better and more aligned customer experience”.
