Westpac has entered into an agreement to sell its Vendor Finance business to Angle Finance, which is part of global asset manager Cerberus Capital Management.

Vendor Finance “supports third parties to fund small ticket equipment finance loans to around 42,000 Australian businesses.” The sale will result in the transfer of around A$500 million of loans.

Westpac did not disclose the sale price.

Vendor Finance operates out of Westpac subsidiary Capital Finance Australia Ltd. Westpac said it will retain the remaining Capital Finance business.

The sale is the first divestment from a “specialist business division” Westpac set up earlier this year to take a number of low-return businesses out of its core banking areas.

Under the leadership of Jason Yetton the division is reviewing each business. At the time the division was established, Westpac chief executive Peter King said the businesses were all profitable and performing but their returns were not consistent with their risk profiles.

“We need to simplify our businesses. When we look at where we can add value our performance has been driven by banking. The other businesses have not done as well and they have absorbed significant management time,” King said.

The businesses include superannuation, wealth platforms, investments, auto finance, general insurance, life insurance and Westpac Pacific.

The buyer, Cerberus will be familiar as the buyer of small business lender Axsesstoday last year. Axsesstoday went into administration in April last year, after senior lenders told the company they were not prepared to support it with ongoing waivers of breaches of loan terms.

In 2018, Cerberus acquired the Australian, New Zealand and Philippines operations of lender Bluestone Group.

At the time of the Bluestone deal, a company spokesperson told the Australian Financial Review that it was “looking at more opportunities in company platforms or assets in the loan and real estate space”.