CBA flags $840m profit from asset sales, including offloading BoCommLife stake

Commonwealth Bank to boost capital ratio from sales designed to simplify the lender, including offloading its BoCommLife stake.

Commonwealth Bank has sold its 37.5 per cent stake in BoCommLife to Mitsui Sumitomo Insurance. Picture: Bloomberg

Commonwealth Bank has flagged a profit of $840m from the sale of BoCommLife Insurance Company and other divestments, to be recognised as a non-cash item in the December half-year.

In an update to the market on Wednesday, CBA said the China Banking and Insurance Regulatory Commission had approved the divestment of CBA’s 37.5 per cent stake in BoCommLife to Mitsui Sumitomo Insurance Co.

The final sale proceeds are expected to be $886 million, with the deal scheduled to be completed by the end of 2020.

CBA said it had also revised the non-cash gains and losses on other divestments, including Colonial First State, Colonial First State Global Asset Management, CommInsure Life and Ausiex.

The bank said that the capital impact of the expected $840m non-cash profit would be a 29 basis-point increase in CBA’s common equity tier one ratio, based on the group’s risk-weighted assets at the end of September.

Of this, 17 basis points was from the BoCommLife transaction, to be recognised once the sale proceeds have been repatriated from Colonial Mutual Life.

CBA reaffirmed that completion of the CommInsure deal was expected to occur through a statutory asset transfer in the second half of the current financial year.

Completion of the BoCommLife divestment would therefore not affect the timing of the CommInsure Life divestment.