MELBOURNE, Australia—Final bids for Australia & New Zealand
Banking Group Ltd.'s vehicle finance unit are due by the end of the
month, people familiar with the auction said, in a deal that will
help the bank raise money to meet regulatory demands to hold
additional capital.
A takeover offer from investment bank Macquarie Group Ltd. for
ANZ's Esanda Dealer Finance, which has about 8.3 billion Australian
dollars (US$6.1 billion) in lending assets, has been flagged by
Australia's competition regulator for an informal review.
Other suitors include Carlyle Group, which has more than US$193
billion of assets under management, and Chinese conglomerate HNA
Group Co., one of the two people said. A spokeswoman for Carlyle
declined to comment, while HNA didn't immediately respond.
ANZ, one of Australia's biggest lenders, in May said it planned
to send out an information memorandum to potential bidders. Chief
Financial Officer Shayne Elliott this week said the process had
gone through a second round after attracting a lot of interest
domestically and internationally, and that the field of interested
buyers had been narrowed down.
He said a sale was highly likely and would contribute toward the
bank's efforts to increase capital.
The lender has said the Esanda business—which provides
point-of-sale financing to customers of vehicle dealers, bailment
and other wholesale finance, as well as financing under car
manufacturers' brands—was no longer viewed as a core operation.
It said it would continue to provide asset finance to customers
under the ANZ banner and that a sale won't include ANZ's commercial
broker, commercial asset finance or direct-to-consumer asset
finance businesses.
The Australian Competition and Consumer Commission in a notice
on its website said it would investigate a proposal from
Macquarie's banking arm to buy Esanda and was seeking submissions
on how it could potentially hurt competition. Macquarie's leasing
business offers similar financing services and has finance
arrangements with several car makers.
A spokeswoman for Macquarie declined to comment on the bank's
bid.
The country's largest lenders will need to set aside billions of
dollars more against potential home-loan losses after the
Australian Prudential Regulation Authority this week said they
needed to increase average mortgage risk weights—a measure of the
capital needed as a buffer against the estimated risk of the
loans—to at least 25% from next July, from 16% currently.
The regulator has said it wants to ensure the banks are
"unquestionably strong," and is waiting on a broader review by the
international Basel Committee on Banking Supervision before
deciding whether to enforce an increase in banks' overall capital
ratios.
ANZ's Mr. Elliott said other options to increase capital could
include retaining earnings, through dividend-reinvestment plans and
from the sale of some of the several stakes it has in banks in
Asia, which he added would be attractive to a range of investors
but could be complicated to exit.
Some of ANZ's rivals have already moved to increase capital.
Westpac Banking Corp. has moved to reduce its controlling stake in
BT Investment Management Ltd. and in May said it would raise about
A$2 billion through a dividend reinvestment offer to shareholders,
while National Australia Bank Ltd. said it is raising A$5.5 billion
via a capital raising that would also smooth the way for it to exit
its U.K. banking business later this year.
Write to Robb M. Stewart at robb.stewart@wsj.com
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