2 Min Read
* Initial 19 pct sale valued at up to $480 mln
* To sell remaining 10 pct subject to market conditions
* Sale comes ahead of new capital requirements, tax (Recasts, adds Westpac comment)
SYDNEY, May 24 (Reuters) - Westpac Banking Corp on Wednesday said it plans to divest of its 29 percent stake in BT Investment Management Ltd (BTIM), in a sale that would bolster the lender's capital base and add to its cash balance as it faces a new tax.
Australia's second-biggest bank by assets said it would initially offer 19 percent to institutional investors through broker Macquarie Capital at a price that valued the holding at up to A$645 million ($480.85 million).
Jim Cooper, head of Westpac's wealth division, said the bank's focus on its wealth platform for financial planners combined with BTIM's push to grow its investment business outside Australia meant Westpac no longer needed a shareholding.
Westpac said its Tier 1 capital ratio, which stood at 10.0 percent as of March 31, will rise by 10 basis points as a result of the sale.
The sale comes after the Australian Prudential Regulation Authority flagged it would require banks to hold additional capital against their mortgage books later this year.
Westpac also has the prospect of a new tax on big Australian banks that it said could lower annual profit by A$260 million.
The bank said it would sell its remaining 10 percent holding in BTIM in the future, subject to favourable market conditions. It said the 10 percent stake would be held in escrow until the release of BTIM's 2018 first-half results, expected next May.
BTIM was not available for comment.
($1 = 1.3414 Australian dollars)
Reporting by Jamie Freed; Editing by Christopher Cushing