ANZ bank said to be mulling $2.19 billion sale of finance business

SYDNEY Bloomberg) - Australia & New Zealand Banking Group (ANZ) is considering the sale of its vehicle and equipment finance business for as much as A$2 billion (S$2.19 billion), people with knowledge of the transaction said.

ANZ may begin the process for the sale of Esanda next month based on feedback from potential bidders, the people said, asking not be named as the discussions are private. The bank is yet to appoint an adviser for the transaction, one of the people said.

ANZ and its competitors face the prospect of stricter capital rules. Australia's four largest lenders may need as much as A$30 billion in fresh capital, CIMB Group Holdings Bhd. estimated after a government inquiry in December said banks should have "unquestionably strong" reserves.

"While the future of Esanda has been the source of constant speculation over the last decade we don't comment on market rumors," ANZ's Melbourne-based spokesman Stephen Ries said on Tuesday (Jan 20). The Australian Financial Review reported the potential sale earlier.

Esanda had A$16.15 billion in net loans as of Sept. 30, according to ANZ's annual results filing. Its origin can be traced to an industrial finance business set up by English Scottish and Australian Bank Ltd. in 1953. Esanda became a unit of ANZ in 1970 and a division in 2009, according to its website.

The Australian bank also operates a similar unit in New Zealand, UDC Finance, according to its website.