Key Highlights:
- NAB announces the sale of its remaining 20% stake in MLC Life Insurance to Nippon Life Insurance for $500 million.
- The sale is part of Nippon Life’s broader acquisition of Resolution Life Group, combining MLC Life Insurance and Resolution Life Australasia to form one of Australia’s largest life insurers.
- The sale will not have a material impact on NAB’s cash earnings but will result in a gain on sale and a 10 basis point increase in Common Equity Tier 1 (CET1) capital.
Melbourne, Australia, December 20, 2024 – National Australia Bank Limited (NAB) (ASX: NAB) today announced that it has entered into an agreement to sell its remaining 20% stake in MLC Life Insurance to Nippon Life Insurance Company for $500 million. This transaction forms part of a broader strategic deal announced by Nippon Life, where it will acquire Resolution Life Group. As part of this deal, MLC Life Insurance will be merged with Resolution Life Australasia, creating one of Australia’s largest life insurers.
Nippon Life originally acquired an 80% stake in MLC Life Insurance from NAB in October 2016, with NAB retaining the remaining 20%. The Resolution Life Acquisition now provides an appropriate opportunity for NAB to divest its remaining interest in MLC Life Insurance, marking the end of its involvement in the business.
Continued Support for MLC Life Insurance Post-Sale
As part of the agreement, NAB has also agreed to provide up to $150 million in contingent Tier 2 capital support to the combined MLC Life Insurance and Resolution Life Australasia business if needed. This support will be available for up to three years after the completion of the acquisition, ensuring a smooth transition for the new entity.
Financial Impact
The Proposed Sale is not expected to have a significant impact on NAB’s cash earnings. However, upon completion, NAB will recognise a gain on sale within its statutory net profit. Additionally, the transaction is expected to result in a 10 basis point increase in Level 2 Common Equity Tier 1 capital for NAB, further strengthening the bank’s financial position.
Transaction Timeline
The Proposed Sale is still subject to the satisfaction of certain conditions, including the completion of the Resolution Life Acquisition and obtaining necessary regulatory approvals. The sale is expected to be completed in the second half of calendar year 2025.
