Exclusive: National Australia Bank considering sale of life insurance unit - sources

Wed Sep 24, 2014 5:46am EDT
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By Swati Pandey and Denny Thomas

SYDNEY/HONG KONG (Reuters) - National Australia Bank (NAB) (NAB.AX: Quote) is considering the sale of its life insurance unit worth an estimated $800 million, seeking to boost earnings and returns on capital, people familiar with the matter told Reuters.

Under new CEO Andrew Thorburn, Australia's fourth-largest bank by market value hopes to speed up the disposal of assets to help it focus on its domestic and New Zealand franchises.

Last month, it announced plans to list U.S. bank Great Western Bancorp Inc, adding that it could offload 100 percent of its ownership over time. Expectations are also high that it will move to sell its UK assets, Yorkshire Bank and Clydesdale Bank.

Melbourne-based NAB is likely to test potential buyer interest for the life insurance unit before deciding whether to launch any formal sale, the people said, adding that an advisor had yet to be appointed.

Insurers from Japan, Canada, Hong Kong and Australia could be interested in the business, they added.

A spokeswoman for NAB declined to comment. The sources declined to be identified as the discussions were private.

A sale would come amid tougher times for much of Australia's life insurance sector.

"There's a greater number of claims, the claims have been more expensive and have taken longer to resolve, there’s been a greater lapse in policies and reduced life insurance amount," said Morningstar analyst David Ellis.   Continued...

A National Australia Bank (NAB) logo is pictured on an automated teller machine (ATM) in central Sydney September 12, 2014.    REUTERS/David Gray