The Bull

Saturday 17

November, 2018 1:13 AM



CBA $426m Indonesian insurance stake sale

CBA $426m Indonesian insurance stake sale

Commonwealth Bank is selling its 80 per cent stake in an Indonesian life insurance business and will boost its capital reserves with the profits.

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By AAP 23.10.2018 10:35 AM

Commonwealth Bank is selling its 80 per cent stake in an Indonesian life insurance business for $426 million.

The lender says it will make a post-tax profit of about $140 million on the sale to FWD Group, increasing its common equity tier 1 capital ratio by 0.07 percentage points.

"The transaction aligns with CBA's strategy to focus on its core banking businesses and to create a simpler and better bank," CBA said in a statement on Tuesday.

CBA's Indonesian banking business, PT Bank Commonwealth, will distribute FWD products under a 15-year agreement once the deal completes in the first half of the 2019 calendar year.

Along with its major rivals, CBA has been divesting non-core assets and is already generating $3.8 billion from the sale of its NZ insurance unit and local CommInsure Life business.

The Sovereign deal in NZ completed in July, while the CommInsure sale is expected to go through in the first half of 2019, when CBA also expects to wrap up the $688 million sale of its stake in Chinese life insurer BoComm Life.

At 1035 AEDT, CBA shares were down 25 cents, or 0.36 per cent, at $67.10, making them the best performing of the big four lenders in a lower overall market.

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