The Commonwealth Bank says it will receive $886 million for the sale of its equity interest in the BoCommLife Insurance Company after the divestment got the go-ahead from Chinese regulators.
The profits raised will go to bolster the bank’s core capital.
The bank told the ASX on Wednesday said the China Banking and Insurance Regulatory Commission granted approval for the divestment of its 37.5% stake in BoCommLife to MS&AD Insurance Group Holdings, the ultimate parent company of Japan’s Mitsui Sumitomo Insurance.
The divestment is expected to be completed by the end of this year.
CBA said that factoring in the non-cash gains and losses on disposal of previously announced divestments including BoCommLife, CFS, CFSGAM, CommInsure Life, and Ausiex, the total increase in unaudited post-tax statutory earnings is expected to be approximately $840 million, which will be recognised as a non-cash item in the December first half result.
The capital impact of the divestments is “a Pro-forma uplift to the Group’s Common Equity Tier 1 ratio of 29 basis points, based on the Group’s risk-weighted assets as at 30 September 2020.”
CBA shares ended up more than 2% at $83.53 on Wednesday
