ANZ sells UDC Finance to Japan's Shinsei Bank

Tuesday, 2 June 2020

ANZ originally planned to sell UDC Finance to a Chinese company in 2017 but the move was blocked by the OIO.

ANZ Bank has agreed to sell its asset finance business, UDC Finance, for $762 million to Japan's Shinsei Bank.

The bank said the sale followed a previously announced strategic review and was in line with its strategy to simplify its business.

ANZ NZ chief executive Antonia Watson said Shinsei intended to retain UDC’s operations and employees, and maintain customer lending in New Zealand.

For ANZ, the sale will release over $2 billion of funding, further strengthening its balance sheet in New Zealand.

* Blocking ANZ's sale of UDC is good for NZ, NZ Shareholders says

ANZ has been trying to sell UDC since 2017, when the Overseas Investment Office rejected the finance company's sale for $660m to Chinese conglomerate HNA.

ANZ NZ chief executive Antonia Watson says UDC will remain an independent company and staff will be retained.

At the time, the Shareholders Association suggested ANZ consider floating UDC on the sharemarket and keeping it in New Zealand hands.

But Watson said the sale to Shinsei would see UDC remain an independent finance company and retain competition in the asset finance market.

Shinsei Bank's purchase was a significant vote of confidence in the New Zealand economy, she added.

“With a strong outlook for infrastructure and agriculture projects as the New Zealand economy rebuilds post-Covid-19, there is a significant role for UDC to play.

''As such, it needs an owner that can invest in and grow the business.”

UDC made an interim net profit of $24.5m in the six months to March 31, down from $34.7m in 2019. It holds net loans and advances worth $3.437 billion.

The sale price represents a price-to-book ratio of 1.2 times UDC's net tangible assets, which were worth $637m on March 31.

Shinsei has both banking and non-banking business divisions, and run asset financing and vehicle and consumer lending businesses similar to UDC's.

Its chief executive Hideyuki Kudo said as society readjusted to a Covid-19 ‘'new normal,’' he was confident that UDC would continue to aid the New Zealand economy ''and help people and businesses in New Zealand with their financial needs''.

The sale is subject to regulatory approval and is expected to be finalised in the second half of this year.