To give fillip to its non lending earnings and arrest rising bad debts, National Australian Bank, has agreed to buy the Australian wealth management and life insurance business of the UK’ insurance major, Aviva for A$825 million, reported Bloomberg.
NAB said in a statement that it will get Aviva Australia’ Norwich Union Life and Navigator businesses, as well as stakes in four independent financial advisory firms.
Cameron Clyne, CEO of NAB, said “This acquisition will enhance our offering in key wealth management segments including insurance and investment platforms, adding scale, efficiency and new capabilities to our operations.”
Capital strength has been an Achilles heel to insurance groups across the globe and Aviva in particular. Aviva posted a loss of about $1.5 billion in March this year and is paring back products and jobs in the UK to improve profit growth. “The decision to sell these businesses is based on the belief that it would be challenging to reach a leading position in Australia in the foreseeable future in an increasingly consolidated market,” Aviva said in a statement.
NAB expects the deal to be completed by the fourth quarter of 2009, subject to regulatory approval.
