NAB announced today an agreement to sell its wealth arm for $1.44 billion to IOOF Holdings, more than a year after holding off its divestment plan because of the fallout from the Hayne royal commission.

The sale of MLC Wealth includes MLC’s advice, platforms, superannuation & investments and asset management businesses but NAB will retain legal ownership of MLC’s advice entities for the purpose of completing advice-related remediation programs.

Other assets of the advice entities and related employees of the advice business will be transferred to IOOF as part of the transaction.

The sale is expected to close before the middle of next year, pending clearance from relevant regulatory authorities.

NAB has previously said it wants to focus on its core banking operations.

“We have a clear plan and we are getting on with it,” Group CEO Ross McEwan said. “The sale of MLC will enable NAB to prioritise investment and focus on executing our refreshed strategy of delivering simpler, more streamlined products and processes for our customers and colleagues.

“We have explored a range of transaction options and are confident this sale provides the best outcome for NAB shareholders and for MLC stakeholders.

“We recognise the specialised nature of wealth management and the opportunity for the MLC business as part of IOOF.”

As part of the deal, NAB will receive $1.24 billion in cash proceeds and $200 million in the form of a five-year structured subordinated note in IOOF.

NAB also expects to get about $220 million of surplus cash from MLC through a pre-completion dividend.

The bank says the sale will result in a post-tax loss of about $400 million, including estimated post-tax separation and transaction costs of $200 million.