MELBOURNE, Australia--Commonwealth Bank of Australia Ltd. (CBA.AU) has agreed to sell its life insurance businesses in Australia and New Zealand for 3.8 billion Australian dollars (US$3.05 billion) and said it is considering options including a listing for Colonial First State Global Asset Management.
The life insurance operations will be bought by AIA Group Ltd. (1299.HK), a pan-Asian insurance company with existing businesses in Australia and New Zealand, and should release about A$3 billion in Tier 1 capital for Commonwealth Bank.
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Due largely to the carrying value of goodwill, the sale is expected to result in an after-tax loss of about A$300 million, Commonwealth Bank said.
The sale includes a 20-year partnership with AIA to provide life-insurance products to Commonwealth Bank's customers in Australia and New Zealand, and the Sydney-based lender said it would continue to earn income on the distribution of life and health insurance products.
Commonwealth Bank's general insurance and CommInsure brand will be retained, it said.
The bank also said it is undertaking a strategic review of its global asset management business, Colonial First State, which has A$219 billion in assets under management. The review will consider a range of options, including an initial public offering, the bank said.
With the agreement to sell the life insurance businesses, Commonwealth Bank said its executive for wealth management, Annabel Spring, had decided to leave the bank in December. Ms. Spring, who joined Commonwealth Bank in 2009 as head of strategy, will continue to lead the wealth-management business, the sale process and strategic review until the end of the year, the bank said.
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(END) Dow Jones Newswires
September 20, 2017 18:41 ET (22:41 GMT)