Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

CBA sells CommInsure, Sovereign for A$3.8 billion

CBA sells CommInsure, Sovereign to AIA Group for A$3.8 billion

By Paul McBeth

Sept. 21 (BusinessDesk) - Commonwealth Bank of Australia has sold its trans-Tasman life insurance businesses CommInsure Life and Sovereign Assurance for A$3.8 billion to global insurer AIA Group.

The sale is a quick turnaround for Australia's biggest lender, which touted the exit of its life insurance businesses last month after the units attracted potential buyers. The deal, which is subject to various regulatory approvals in Australia and New Zealand, includes a 20-year partnership where CBA and its Kiwi subsidiary ASB Bank will continue to sell those products.

The price is at a price-to-earnings multiple of 16.9 times, and CBA said it will book a A$300 million loss on the sale with a A$1.4 billion writedown in goodwill. The deal will improve the bank's capital ratio, releasing about A$3 billion of common equity tier 1 capital. Australia's banking regulator has imposed tougher prudential requirements on lenders, prompting them to beef up their balance sheets in recent years.

"The transaction will deliver important strategic benefits to Commonwealth Bank, contributing the group's vision to secure and enhance the financial well-being of customers whilst creating value for shareholders," the lender said in a statement. "Under the terms of the partnership, Commonwealth Bank will continue to earn income on the distribution of life and health insurance products."

The transaction is expected to be completed in calendar 2018, and make AIA the biggest life insurer in both Australia and New Zealand. Customers will keep the current benefits of their existing policies, the lender said.

CBA will continue to make and distribute general insurance products under the CommInsure brand.

The deal excludes CBA's life insurance joint venture in China, where it holds a 37.5 percent stake in BoComm Life Insurance Co. That equity interest will be transferred out of CommInsure Life, and the bank said it's looking at a "range of strategic alternatives" for that investment.

CBA shares last traded on the ASX at A$76.29 and have declined 7.4 percent so far this year.


ENDS


© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 




Barfoot & Thompson: Auckland Rental Prices Inch Up Again, But Upward Trend Could Ease In Coming Months

Data from nearly 16,000 rental properties managed by real estate agency Barfoot & Thompson shows Auckland’s average weekly rent rose by $6.12 (or 1 percent) during the second quarter... More>>

ComCom: Draft Report Says Regulatory System Favours Established Building Products
The Commerce Commission’s draft report into competition in the residential building supplies industry has identified two main factors negatively impacting competition... More>>

Statistics: Annual Wage Inflation Rises To 3.4 Percent
Wage inflation, measured by the labour cost index (LCI), was 3.4 percent in the year ended June 2022, while average ordinary time hourly earnings rose 6.4 percent, Stats NZ said today... More>>

ALSO:



Heartland: Retirees Facing Pressure From Higher Cost Of Living And Increasing Debt In Retirement

Heartland has seen a significant increase in Reverse Mortgages being used to repay debt. Among the most affected by the increasing living costs are retirees, many of whom are trying to get by on NZ Super alone... More>>


APEC: Region’s Growth To Slow Amid Uncertainties And Crises
Economic growth in the APEC region is expected to slow this year amid soaring inflation, a protracted war in Ukraine and heightened uncertainties, on top of the continuing impact of the pandemic and virus mutations that are draining resources, according to a new report by the APEC Policy Support Unit... More>>


Financial Markets Authority: Survey Sheds Light On New Zealanders’ Experiences With Financial Sector
Most New Zealanders are confident in their ability to make financial decisions, but only one-fifth say they are in a secure financial position... More>>