Commonwealth Bank sells stake in insurer

In a statement, the bank said it is selling its stake to Japanese firm Mitsui Sumitomo Insurance Co for $688 million as part of its plan to streamline the business’ portfolio.

“This transaction represents a further step in simplifying and focusing our portfolio and follows the announcement of the proposed sale of the Group’s life insurance businesses in Australia and New Zealand to AIA Group, and the strategic review of the Group’s life insurance business in Indonesia,” said Commonwealth Bank chief executive Matt Comyn.

The sale will be subject to the China Banking and Insurance Regulatory Commission’s regulatory approval process, and Chinese merger clearance.

BoComm Life also plans to undertake a capital raise prior to the sale, to which the Commonwealth Bank’s pro rata contribution will be $235 million; however, this “will be separately reimbursed in full” by Mitsui Sumitomo upon completion of the sale, the statement said.

The sale will also satisfy one of the conditions included in the sale of the bank’s Australian and New Zealand insurance businesses to AIA, the statement said.