Wealth manager IOOF Holdings Ltd will acquire National Australia Bank’s wealth business for $1.44 billion to help save costs and expand its reach.

NAB, Australia’s third-largest bank by market capitalisation, decided in 2018 to divest MLC Wealth but delayed plans due to a management overhaul and a government-appointed inquiry into the financial services sector that found industry-wide misconduct.

IOOF expects the acquisition to be completed by June 30 next year and to deliver $150 million of annual pre-tax cost savings by the third full year of ownership.

“The opportunity to acquire a highly complementary business of the quality and size of MLC is compelling,” IOOF CEO Renato Mota said in a statement on Monday.

“MLC is a natural fit with IOOF and presents a unique opportunity to create value from synergies.”

IOOF will fund about $1 billion of the deal value through an institutional placement and entitlement offer.

The rest would be funded with debt, a loan note issued to NAB and existing cash.

In a separate statement, NAB said it would book a post-tax loss of about $400 million on the divestment.