CBA mops up remaining 20pc stake in Aussie Home Loans, eyes CommInsure exit

Aussie Home Loans' John Symond in his Sydney office. (Britta Campion/The Australian)

Aussie Home Loans founder John Symond has sold the remaining 20 per cent of the business to Commonwealth Bank in a deal brokered just days before the bank delivered a record profit.

In its results presentation today, CBA (CBA) said it would buy the stake after Mr Symond exercised an option that would prompt the bank to absorb the remaining share.

The purchase price will be determined in line with a deal struck in 2012 and Mr Symond will be paid in CBA shares and the deal is expected to be finalised this month.

Commonwealth last year valued its 80 per cent stake of Aussie at $272 million, which meant the final 20 per cent would be worth about $68m. The deal means Mr Symond has now earned $340m from CBA.

The bank also flagged that it had been approached by ‘third parties’ interested in its Australian and New Zealand life insurance businesses which would be worth more than $2 billion.

It is understood that JPMorgan is working with CBA on a potential deal and the sale comes as ANZ is also trying to offload its life insurance business.

Suncorp and AMP have also flagged their life insurance businesses are likely to be sold in the future as part of the ongoing consolidation in the financial services sector.

“The outcome of those discussions is uncertain,” CBA said in relation to CommInsure.

“While the discussions may lead to the divestment of those businesses, we will also consider a full range of alternatives, including retaining the businesses, reinsurance arrangements or other strategic options.”

The Australian reported in March that Mr Symond would stay on as chairman of Aussie Home Loans once the mortgage broking business was absorbed into CBA.

Aussie, the nation’s biggest mortgage broking franchiser group, settled $22bn of loans last calendar year, boosting the group’s commission and servicing book to more than $76bn.

Aussie had flagged plans to expand Aussie’s network of stores from 205 to 300 by 2020, when he predicted its broker numbers would have ­expanded 7 per cent to 1,500, and its servicing book hit $100bn.

CBA, the nation’s biggest ­lender, has the option of increasing its stake in Aussie after striking a deal with Mr Symond in late 2012 that included the bank ­paying a mooted $200 million to increase its ownership from 33 per cent to 80 per cent.