Today's sale, one of a string of recent divestments, follows a general push by the Australian Prudential Regulation Authority for the big four banks to improve their already high capital adequacy ratios, in line with the findings of the Murray inquiry into the Australian financial system in 2014.
In addition, the latest set of international banking accords, dubbed Basel Four, is expected to propose a higher standard on capital reserves for banks to mitigate against the risk of financial crisis.
Graeme Hodges, deputy chief executive of ANZ Group, said the sale of UDC, together with the other asset sales, would represent about a 70 basis point improvement for the bank's capital ratio.
"It is not just about capital - it's about streamlining and simplifying our business," Hodges told the Herald.
"We would rather focus [on] our core banking business rather than the asset financing business, and we were offered very good price for this," he said.
Massey University banking expert David Tripe said the UDC sale would help "tidy up their accounting position a little".
"With UDC they have got a reasonable price over book value," he said. "That winds up as a gain on the balance sheet, so that improves their numbers in that regard," Tripe said.
The UDC deal follows the sale last week of ANZ's 20 per cent stake in Shanghai Rural Commercial Bank to COSCO and Sino-Poland Enterprise for A$1.84b.
The bank announced the sale of its retail banking and wealth management businesses in five Asian countries to Singapore's DBS bank in October, as part of its strategy to wind back previous chief executive Mike Smith's program to expand into Asia.
In November, ANZ reported a drop in cash profit to a six-year low as it copped the costs from a major restructure under new chief executive Shayne Elliott.
ANZ is also reviewing the future of its Australian wealth division as it looks to focus only on areas in which it has enjoyed a long-term competitive advantage.
ANZ sold its Esanda car leasing and finance business to Macquarie Group in 2015, and had been reviewing its stake in UDC Finance for more than a year.
The bank's New Zealand chief executive David Hisco said the sale followed a strategic review and was in line with ANZ's strategy to simplify its business and focus on its core banking activities.
The purchase price represented a price-to-book ratio of 1.6 times net assets of $424m as at 30 September 2016.
The UDC sale is subject to regulatory approvals.
