- Commonwealth Bank has revised the sale price for its life insurance branch, slashing $150 million off the total
- A series of regulatory approvals is delaying the sale
- CBA’s share price is down marginally, by 0.065 per cent, currently sitting at $77.05 per share
Commonwealth Bank has chipped $150 million off the original sale price of its life insurance branch, CommInsure Life.
CommInsure Life is being sold to the Hong Kong Stock Exchange listed life insurance company, AIA Group.
The banking giant explained to the market this morning the ongoing arrangement between the companies is subject to a series of regulatory approvals. This has delayed the sales process.
As it stands, the purchase price is set at $2.375 billion, following the $150 million cut. AIA will pay $750 million to Commonwealth in the first half of the 2020 financial year, and CBA will then receive a second payment of $1.625 billion before the end of the 2020 financial year.
CEO of Commonwealth Matt Comyn said: “Today’s announcement provides CommInsure Life’s policyholders and staff with more clarity about the future of the business.”
However, there are still a number of approvals to obtain from Australian insurance regulators before the final transaction.
AIA also has the opportunity to extend its distribution agreement from 20 to 25 years.
In other CBA news, two new members assumed positions in the bank’s executive leadership team.
Carmel Mulhern is joining as Group Executive, Group General Counsel and Governance. Scott Wharton is assuming the role of Group Executive, Program Delivery.
“These two appointments considerably strengthen the capability and capacity of the executive leadership team to provide the leadership and expertise we need to help CBA become a simpler, better bank,” Matt said.
CBA’s share price is down a slight 0.065 per cent, currently sitting at $77.05 per share at AEST 11:00 am.