National Australia Bank (ASX:NAB) has announced it is in advanced discussions to purchase the brand name and Australian distribution network of unlisted Wizard. The proposed purchase price is not material to NAB.
As well as the distribution network, NAB is also in the final stages of negotiating to acquire up to $4 billion of Wizard originated prime mortgages. The mortgage portfolio comprises prime mortgages with a maximum loan to valuation ratio of 90% and is 100% mortgage insured. The transaction, as currently proposed, will not impact materially on NAB’s Tier 1 capital ratio, and the funding requirement associated with the mortgage portfolio under negotiation can be accommodated within NAB’s previously announced funding plans for the 2009 financial year.
The acquisition of Wizard would progress the NAB retail strategy of providing customers with products and services that match their individual needs using a multi-brand approach.
A final decision is yet to be made but discussions are well advanced.
NAB was last trading at $19.15.