NAB in $2.4b Life business sale
National Australia Bank (NAB) has confirmed the sale of 80 per cent of its life insurance business and the development of a partnership with Nippon Life at the same time as announcing a 19.7 per cent increase in full year net profit to the Australian Securities Exchange today.
The company said that excluding discontinued operations, statutory net profit increased 22.7 per cent to $6.36 billion.
The company used its full-year results announcement to confirm the transaction and partnership with Nippon Life — something which had been canvassed in the market as NAB entered a trading halt yesterday.
The Nippon Life transaction ensured that NAB's wealth management business was a central focus of the full-year results announcement, with the big banking group's chief executive, Andrew Thorburn saying that Nippon would acquire 80 per cent of the bank's life insurance business with NAB retaining 20 per cent. The transaction is valued at $2.4 billion and is expected to be completed in the second half of next year.
The transaction will occur through the sale of 80 per cent of MLC Limited after the extraction of NAB's superannuation and investments business, with NAB retaining the MLC brand.
He said the partnership would enable NAB to continue to deliver insurance solutions to customers while improving the wealth division's returns to shareholders.
"Wealth products remain important to our business which is why today we are also announcing additional investment of at least $300 million in NAB Wealth over the next four years in our superannuation, platforms, advice, and asset management business," Thornburn said.
The full year results revealed that NAB Wealth cash earnings increased 27 per cent to $464 million, benefiting from stronger insurance income and stable costs.
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