ANZ Sells Visa Share for $225 Million

ANZ Bank (ASX:ANZ) has sold the last of its shareholdings in Visa Inc.

• The company sold the last of its stake in Visa selling off 3.5 million shares. ANZ netted a profit after tax of $244 million from the trade.
• ANZ chief financial officer Shayne Elliott said, " The industry-wide requirements to hold more capital means that ANZ will have to increasingly focus on managing returns to shareholders by building on the Group's strategy in the most capital efficient way. The disposal of our Visa shares made sense given the non-strategic nature of the holding coupled with their less than attractive capital treatment under Basel III."
• Basel III is an international regulatory financial banking standard in which requires its participants to hold larger reserves of capital. The regulations also stipulate certain liquidity and leverage ratios.
• Basel III also requires banks to hold more capital against investments. While Visa was held as an equity investment, Basel III would require banks like ANZ to hold more capital for its investments in associates and partnerships. Hence, by holding more capital against investments – this would thereby reduce Return on Equity (ROE).
• ANZ, over the past decade, has been building a series of minority investments in Asia, with partnerships in banks and credit cards.
• The sale of shares will be treated as a non-core item in the company's financial statement.
• ANZ had bought a stake in American listed Visa Inc during its initial public offering (IPO) in 2007 when stocks were at US$44. The stock was recently seen trading at US$133.