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  • Commonwealth Bank of Australia (CBA) will sell 55 per cent of its stake in Colonial First State (CFS) to private equity firm, KKR, for $1.7 billion
  • CEO Matt Comyn says his vision for CFS is to become one of the leading superannuation and investment businesses in Australia
  • On top of the deal, the company will also take a $1.5 billion provision for the potential costs of COVID-19
  • For CBA, this brings total provisions to $6.4 billion
  • Australia’s largest bank reported its cash profit for the third quarter fell to $1.3 billion, from $1.7 billion this time last year
  • Commonwealth is up 1.02 per cent on the market this morning, selling shares for $60.32 each

Commonwealth Bank of Australia (CBA) will sell 55 per cent of its stake in Colonial First State (CFS) to private equity firm, KKR, for $1.7 billion.

The sale will allow CFS to become a more focussed standalone business, in a deal that valued the whole of CFS at $3.3 billion

Commonwealth is expecting to pocket $1.5 billion from the deal after-tax and deal costs.

CEO Matt Comyn says his vision for CFS is to become one of the leading superannuation and investment businesses in Australia.

March quarter

On top of the deal, the company also will take a $1.5 billion provision for the potential costs of COVID-19, total provisions are now at $6.4 billion.

Australia’s largest bank reported its cash profit for the third quarter fell to $1.3 billion from $1.7 billion this time last year, while its net profit also dropped to $1.3 billion from $1.75 billion in 2019.

Commonwealth said it is doing the best it can to support Australians during these challenging times.

“The bank is well funded, with significant levels of excess liquidity and strong capital,” Matt said to reassure shareholders.

“The strength of the bank means we are well placed to support our customers and the broader Australian economy,” he added.

Since COVID-19 outbreak, Commonwealth said its support packages have included over $9 billion to approximately 100,000 businesses. It has issued payment deferrals for around 240,000 loans.

The banks have paid its first half of 2020 dividend payments of $3.5 billion to around 830,000 shareholders.

“Our strong capital position enabled us to deliver 1H20 dividend payments totalling $3.5 billion to our approximately 830,000 shareholders during March, providing a further direct cash benefit into the economy,” Matt said.

“I am proud of the ongoing efforts of everyone across the Group and I know that the Commonwealth Bank will continue to support our people, our customers and the broader Australian community,” he added.

Commonwealth is up 1.02 per cent on the market this morning, selling shares for $60.32 each at 10:54 am AEST.

CBA by the numbers
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