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ACGLP - Arch Capital News Story

$25.5 0.0  0.0%

Last Trade - 07/05/21

Sector
Financials
Size
Large Cap
Market Cap £11.77bn
Enterprise Value £14.47bn
Revenue £6.00bn
Position in Universe 695th / 6858

BUZZ-Jefferies expects Westpac LMI business sale to increase its proforma CET1

Thu 18th March, 2021 9:08pm
** Jefferies lifts Westpac Banking Corp  WBC.AX  Price
Target to A$22.55 from A$22.40, maintains 'hold' rating
    ** Brokerage notes that WBC sold its Lender Mortgage
Insurance (LMI) business to Arch Capital Group Ltd  ACGL.O  on
March 18, which is expected to complete by end of August 2021
    ** Jefferies assumes WBC will record a FY21 loss on sale of
A$50 mln ($38.76 mln)(pre-tax)and notes its previously announced
A$84 mln revaluation goodwill writedown 
    ** "The transaction is expected to add ~7bp to Common equity
Tier 1 (CET1), increasing proforma CET1 from 12.03% to 12.10%" -
Jefferies 
    ** Brokerage anticipates WBC CET1 could be pressured by
rising COVID19 credit weightings, normalisation of sub-peer
housing weighting and Australian Prudential Regulation Authority
(APRA) resuming its Amended Basel 3 program
    ** Says to date, WBC has made little progress in improving 
cost efficiency 
    ** Jefferies also notes, Westpac has committed to update the
market on a cost reset initiative with the 1H21 result, and says
it is apparent WBC needs to increase investment to "fix" the
business
    
($1 = 1.2902 Australian dollars)

 (Reporting by Vasudha Kaukuntla in Bengaluru)
 ((Vasudha.Kaukuntla@thomsonreuters.com))
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