Westpac buys Lloyds' Australian assets for $1.37bn

Banking giant Westpac on Friday said it is buying Lloyds Banking Group's Australian businesses for Aus$1.45 billion (US$1.37 billion), the Australian lender's largest acquisition in five years. Under the deal, the country's second biggest bank by market capitalisation will acquire Capital Finance Australia Ltd and corporate loan portfolio BOS International Australia Ltd by December 31. CFAL has a motor vehicle finance book of Aus$3.9 billion, an equipment finance book of Aus$2.9 billion, and a corporate loan portfolio of Aus$1.6 billion. "This is a value creating, straightforward transaction that makes both commercial and strategic sense," Westpac chief executive Gail Kelly said in a release to the Australian Stock Exchange. "These are strongly performing businesses that we know well and that will expand our reach and capability in target segments." The transaction, Westpac's largest since it paid A$12.6 billion for St. George Bank in 2008, is expected to deliver approximately Aus$100 million in additional cash earnings by financial year 2015. The troubled Lloyds group, which is exiting the Australian market, is off-loading assets it considers non-core to cut costs after it was bailed out by the British government in 2008 with £20 billion of taxpayers' cash.