SYDNEY/HONG KONG: National Australia Bank, the country's fourth-biggest lender by market value, is weighing the sale of its insurance unit, which has been a drag on its earnings and capital, people familiar with the matter told Reuters.
The sources said they estimate the value of the unit at about $800 million.
Under new CEO Andrew Thorburn, NAB hopes to speed up the disposal of assets to help it focus on its Australia and New Zealand franchises.
Last month, it announced plans to list its US unit Great Western Bancorp Inc.
Melbourne-based NAB, with a near $70 billion market value, is likely to test potential buyers' interest in the unit before deciding to launch any formal sale, the people said, adding that an advisor had yet to be appointed.
A sale could attract insurers from Japan, Canada, Hong Kong and Australia, they added.
A spokeswoman for NAB declined to comment.
The sources declined to be identified as the discussions were private.
NAB will likely negotiate a long-term marketing deal with the buyer which would allow it to continue to sell insurance products under its own brand, said one of the sources familiar with NAB's thinking.
The move will help NAB take capital risks off its balance sheet while ensuring customers don't move to rivals for insurance products.
As global capital rules become more onerous, banks are under greater pressure to dispose of non-core assets and scale back capital intensive businesses.
NAB shares were down 1 percent on Wednesday, in line with the benchmark Australian share index.
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