ANZ sells its non-banking financial unit

The Australian banking group continues to sell its assets in Asia, the latest being UDC Finance.

Chinese conglomerate HNA Group has signed an agreement to acquire ANZ Banking Group’s asset finance unit, UDC Finance, for NZ$660 million ($463 million; €439 million) according to a statement.

“UDC's highly diversified portfolio offers significant growth opportunities in Australasia and supports HNA Group’s disciplined approach to expand our core tourism, logistics and financial services businesses,” said Adam Tan, HNA Group vice chairman and chief executive officer.

HNA says it will preserve UDC’s existing operations and employees after the takeover.

UDC is New Zealand’s largest non-bank lender, with $NZ2.6 billion in gross loans in 2016, according to KPMG. The company has a diverse asset-lending portfolio ranging from car loans to equipment finance. It has financed equipment for major projects such as the construction of Wellington Airport, the Ngauranga Gorge motorway and Hunua Dam.

HNA Group is one of the world’s largest asset finance and leasing companies with over $90 billion of assets globally. It announced about $20 billion of deals in 2016, according to Reuters calculations.

ANZ would book around A$100milion ($74 million; €70 million) gain by selling the unit amid plans to build up more capital for its core banking business, according to a local news report.

This will mark the latest major transaction as part of ANZ’s plan to offload $3 billion worth of assets, mostly in Asia. Last week, the bank sold its 20 per cent stake in Shanghai Rural Commercial Bank for $1.35 billion to two Chinese state-owned businesses.

“The sale of UDC is consistent with our strategy to simplify the bank and is a good outcome for customers and staff,” said David Hisco, chief executive officer of ANZ New Zealand.