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Japan’s Shinsei Bank acquires UDC Finance for $480 mn

Shinsei Bank UDC Finance
This is Shinsei’s biggest acquisition till date

Japan-based Shinsei Bank has announced that it has completed a deal to acquire New Zealand-based non-bank finance provider UDC Finance for $480 million, the media reported.

The deal to buy UDC Finance marks Shinsei Bank’s biggest acquisition till date.

Shinsei Bank bought the company from Australia and New Zealand Banking Group (ANZ), who were trying to offload the assets for some time.

In 2017 ANZ Banking Group chief executive officer Shayne Elliott revealed that ANZ was striving to develop a simpler banking strategy and whilst UDC was a good business, ANZ is not the best owner of it.

In a statement, Shinsei Bank said, “Through this stock acquisition, and by leveraging its expertise in the small-scale finance business, Shinsei Bank envisages further growth of UDC in New Zealand where the GDP growth rate is relatively high among the developed countries.”

The deal is subject to regulatory approval.

According to ANZ, Shinsei’s purchase price represents a price-to-book ratio of 1.2x net tangible assets of $637 million as of March 31.

Reportedly, the deal will require Overseas Investment Office approval as well. RBNZ approval will also be required if Shinsei, which is listed on the Japan Stock Exchange,  wants to issue deposits to the public.

With regard to the deal to acquire UDC Finance, Shinsei Bank chief executive officer Hideyuki Kudo told the media, “In the Covid-19 ‘new normal’, we are confident that UDC, as part of Shinsei Bank Group, will continue to grow and contribute to the development of the New Zealand economy and help people and businesses in New Zealand with their financial needs. 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.”

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