A statement from the big four bank said it has agreed to sell-off UDC Finance to Japan’s Shinsei Bank Ltd for the sum of NZ$762 million.

It follows a “strategic review” of UDC Finance by ANZ Bank New Zealand, as is in line with ANZ’s simplification strategy.

According to reports, the sale provides approximately $439 million of level 2 group CET1 capital at settlement and will release more than NZ$2 billion of funding provided by ANZ New Zealand, which will further strengthen the bank’s balance sheet position.

ANZ Bank New Zealand CEO Antonia Watson said the purchase is a significant vote of confidence for New Zealand’s economy, with UDC Finance needing an owner “that can invest in and grow the business” post-COVID-19.

ANZ highlighted that Shinsei Bank Group is a diversified financial group, holding banking and non-banking business divisions.

According to the bank, it operates both asset financing and vehicle and consumer lending businesses similar to those of UDC both in Japan and offshore.

Ms Watson said Shinsei Bank intends to preserve UDC’s operations, retain UDC employees and provide long-term capital to maintain and grow customer lending in New Zealand.

“The sale will also mean UDC Finance will continue to operate as an independent finance company and enhance competition in the asset finance market.”

It follows ANZ’s recent divestment from its Australian pension and investment business offering OnePath.