Australia and New Zealand Banking Group (ANZ) has agreed to sell its New Zealand asset finance business UDC Finance to Shinsei Bank for NZD$762m ($478m).

Shinsei Bank is a Japan-based diversified financial group with both banking and non-banking operations.

It runs asset financing and consumer lending businesses locally and offshore, similar to UDC Finance.

Shinsei Bank CEO Hideyuki Kudo said: “Based on UDC’s long successful history, solid business base and efficient sales structure, UDC will be a major asset for the Shinsei Bank Group.”

The proposed sale follows a strategic review of UDC Finance and is in line with ANZ’s strategy to further simplify its business.

Upon transaction completion, the Group will receive nearly A$439m ($298.4m) towards its Level 2 Common Equity Tier (CET) 1 capital.

The sale is also expected to release over NZD$2bn ($1.25bn) funding provided by ANZ New Zealand to boost its balance sheet.

ANZ Bank New Zealand CEO Antonia 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.”

Subject to the receipt of regulatory approval, the sale is expected to be completed in the second half of 2020.