In another step towards rationalising its Asian businesses, National Australia Bank has sold its insurance assets in Hong Kong and Indonesia to AXA Asia-Pacific.

The A$575 million sale of MLC Hong Kong and MLC Indonesia cleared regulatory hurdles on Wednesday, bringing to a close a deal that was signed in February.

NAB says it will continue to develop its financial services businesses in Hong Kong, Singapore and Japan based on premium banking, wealth management and corporate banking.

AXA Asia-Pacific is calling the deal a strategic success. ôLife insurance margins in Hong Kong are very attractive and, with high savings ratios there is considerable growth potential for life insurance, investment products and wealth management,ö says Les Owen, group chief executive of AXA Asia-Pacific.

ôOur existing 2,400 strong agency and adviser distribution force will be strengthened with the addition of over 800 agents.ö

In Indonesia, Owen says the integration of MLC will add 1,000 agents to its existing force of 1,100, making AXA ôthe second largest life insurer in terms of new businessö.

AXA will fund the transaction from internal capital resources. The acquisition will be earnings neutral in 2006 before one-off integration costs, and is expected to be earnings accretive in 2007.