Thursday, 28 October 2021

Commonwealth Bank to sell majority stake

Reuters

Commonwealth Bank of Australia said it would sell its 80 percent stake in Indonesian life insurance business PT Commonwealth Life to Hong Kong billionaire Richard Li’s FWD Group for A$426 million ($301.57 million).

“The transaction aligns with CBA’s strategy to focus on its core banking businesses and to create a simpler and better bank,” the bank said in a statement.

Most big Australian banks, which are under intense scrutiny from a quasi-judicial investigation of the Australian financial sector, have been streamlining their operations to focus on their core competency: lending.

As a part of the deal, CBA said, its Indonesian banking business PT Bank Commonwealth would enter a 15-year life insurance distribution partnership with FWD.

CBA also said it expected to record a post-tax gain on the sale of about A$140 million and an increase of 7 basis points to its Common Equity Tier 1 ratio as of the end of June.

Reuters reported in September that at least five insurers, including Britain’s Prudential and Canada’s Sun Life , had bid for CBA’s majority stake in the Indonesian insurance unit.

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