Westpac’s full-year financial results, which will be released next Monday, will contain a $406 million writedown of its life insurance business.

The bank says in an investor update today it made the decision after a review showed the valuation of the business does not support the carrying value of its intangibles.

The bank did not mention the future of its life and general insurance units. In May Westpac said it would undertake a strategic review of its non-banking operations, which could include selling the insurance businesses.

The Australian Financial Review reported last week that Allianz is in “advanced discussions” to buy Westpac’s general insurance arm in a deal worth $500 million. Allianz has declined to comment on the article.

Westpac says the writedown and actions on other notable items such as additional provisions for customer refunds will slash its second-half cash earnings by $1.2 billion after tax.