Australian bank Westpac is planning to sell part of its shareholding in its wealth management arm, BT Investment Management (BTIM), in a drive to raise capital.
The bank will offer up to 55 million shares amounting to approximately 19% of BTIM’s issued capital to institutional investors and 9% of the stock will be sold to retail investors.
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The sale will reduce the Australian lender’s holding in the investment management firm from its current 59% to 31%-40%.
The divestment will generate a post-tax accounting gain of about A$600m to A$700m besides increasing Westpac’s common equity Tier one capital ratio by between 10 and 15 basis points.
Westpac Group CFO Peter King said: "The sale allows the Group to realise a part of the investment in BTIM, increasing our capital ratios, while still maintaining a significant interest in BTIM.
"The strength and importance of the relationship remains unchanged. Wealth remains a strategically important focus for the Westpac Group and our continued investment in BTIM sees us maintain a stake in asset management which is a key factor in having a strong and diversified wealth business."
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