National Australia Bank Ltd. has announced that it has hit a deal with U. K. insurer Aviva to buy a large chunk of Aviva Plc's Australian business for $825 million in order to enhance its own wealth management business.

National Australia Bank Ltd., Australia's third-largest bank, stated in a statement to the stock exchange that it expects the businesses to add to earnings within a year of the purchase.

The company also informed that before completion of the deal, Aviva's Australia unit would pay a dividend worth A$40 million to Aviva, the U. K.'s biggest insurer and would also pay a net asset adjustment of A$60 million after the completion of the deal.

National Australia Bank wants its earnings to be boosted from wealth management and insurance to counterbalance bad debts and slower loans growth, emerged from the recent global economic crisis.

All shares in Aviva Australia Holdings Ltd. will be acquired by the National Australia Bank, which includes Norwich Union life insurance, Navigator investment platform operations and strategic stakes in four independent financial advisory firms, excluding Aviva's asset management business or interest in PIH financial advisory business.

When contacted, Cameron Clyne, National Australia Chief Executive, said, "This acquisition will enhance our offering in key wealth management segments including insurance and investment platforms, adding scale, efficiency and new capabilities to our operations."

On the other hand, Aviva said that it sold the unit in order to focus on key growth markets in Asia, where it has high hopes to achieve leading positions.

Presently, Aviva ranks ninth in the Australian life insurance market and its wealth management platform is ranked eighth.

The Aviva unit had earned A$60.7 million in the year to Dec. 31, down 37% from A$96.2 million a year earlier.

The deal that is believed to be completed during the Q4 of 2009 is subject to regulatory approvals.