Global ratings agency Fitch has affirmed National Australia Bank's long-term credit rating at AA with a stable outlook following the bank's $825 million cash acquisition of wealth manager Aviva Australia.
Fitch said the acquisition would expand the scale of NAB's life insurance and investment platform businesses, but would have only a modest impact on the bank's balance sheet.
NAB anticipates $70 million in annual cost benefits from the acquisition, with integration costs expected at $125 million before tax over three years.
The acquisition is subject to regulatory approvals, and will be earnings per share accretive in the first year, Fitch said in a statement.
It will slice about 15 basis points off NAB's tier 1 capital ratio of 8.31 per cent, but almost all of this decline would be offset by a partial underwriting of the dividend reinvestment plan, Fitch said.
AAP
