Australia's NAB Reportedly Selling Life Insurance Arm As New Capital Rules Bite

Tom Burroughes

28 October 2015

has agreed to sell 80 per cent of its life insurance arm to Japan's Nippon Life Insurance for around $1.7 billion, Reuters has reported, quoting unnamed sources.

Earlier yesterday trading in NAB’s shares was halted, pending an announcement. The bank is also due to issue full-year results today, according to its website. Media reports said the bank and the Japanese firm both declined to comment.

However, Australia's biggest lender by assets is expected to announce the sale today, the news service quoted its sources as saying.

The bank, along with its peers, needs to raise funds to comply with stricter Australian capital regulations being imposed on banks. Reports say that other firms, such as Australia and New Zealand Banking Group and Commonwealth Bank of Australia, may take similar courses of action.

Earlier in 2015, Australian regulators set tougher capital rules, designed to make their banks among the most robust in the world.