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Canadian Western Bank selling property, casualty business to Intact for $197M

02/10/2015 07:32 EST | Updated 04/12/2015 05:59 EDT
EDMONTON - Canadian Western Bank Group (TSX:CWB) is selling its property and casualty insurance business to Intact Financial Corp. (TSX:IFC) for $197 million in cash.

The bank, which describes the deal as a refinement of its long-term growth strategy, says the selling price for Canadian Direct Insurance is about 2.5 times the net book value of the subsidiary as of Oct. 31.

"This transaction is the result of a purposeful strategic assessment that we started over a year ago," CWB president and CEO Chris Fowler said in a statement issued Tuesday after markets closed.

"Our strategic direction is to increase the depth and breadth of client relationships through a focus on our core business banking platform with complementary financial services in personal banking, equipment finance and leasing, alternative mortgages, wealth management and trust services."

Fowler said those core areas provided the best opportunities to drive "meaningful future growth" while the insurance business was "much less strategically aligned."

The transaction, subject to regulatory approvals, is expected to close around mid-year.

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