The WA state government’s Keystart Housing Scheme Trust has sold Bendigo and Adelaide Bank $1.35 billion-worth of standard variable-rate residential home loan debt at 0.2% premium.

The loans, roughly a quarter of Keystart’s total loan book of about $4 billion, involves the debt of 6,000 borrowers with an average loan of $225,000 and are already five years into their repayments.

“The acquisition complements our existing business in WA and improves our geographic diversification by increasing the proportion of our loan book in WA from approximately 11 to 13%,” said Mike Hirst, managing director of Bendigo and Adelaide Bank.

“Keystart has a long and successful history of providing residential loans to customers who satisfy rigorous serviceability criteria but do not have sufficient initial savings for a deposit. These customers have proven to be very reliable in repaying their loans and Keystart has an outstanding record of low losses compared to the broader market.”

The purchase will be completed by early December and the transaction will be return on equity and earnings per share accretive for the bank.