Westpac has sold its lenders mortgage insurance business in a deal which will deliver the buyer, Arch Capital, a 10-year exclusive supply agreement.
The big banking group has announced to the Australian Securities Exchange (ASX) that the sale was at book value which would be determined at the completion of the transaction but that it would involve small, fixed annual payments to Westpac over the next 10 years.
The announcement said Westpac would record a loss on sale in the current financial year from separation and transaction costs along with a $84 million write down in goodwill that was announced in its first quarter update.
The company said the sale continued the simplification of the business.
The announcement said that Westpac would retain responsibility for certain legacy matters and provide protection for Arch through a combination of customary warranties and indemnities.