Join our daily newsletter At The Bell to receive exclusive market insights
- Commonwealth Bank (CBA) sells its 10 per cent holding in the Bank of Hangzhou (HZB) for about $1.8 billion
- CBA originally invested in HZB in 2005 and said it has played a meaningful role in the company’s development
- CBA anticipates the transaction will be complete by the middle of this year with a post-tax gain of about $340 million
- It will retain a 5.57 per cent holding in HZB until at least the end of February 2025
- Shares are trading 2.18 per cent higher today at $95.50 each
Commonwealth Bank (CBA) will sell its 10 per cent holding in the Bank of Hangzhou (HZB) for about $1.8 billion.
The company will sell the stake to Hangzhou Urban Construction & Investment Group and Hangzhou Communications Investment Group, which are entities mostly owned by the Hangzhou Municipal Government.
CBA originally invested in HZB in 2005 and said it has played a meaningful role in the company’s development.
It will retain a 5.57 per cent holding in HZB until at least the end of February 2025.
Chief Executive Officer Matt Comyn said these moves form part of the company’s wider strategy.
“Our collaboration has seen HZB become a significant player in retail, wealth management and commercial banking across the Yangtze Delta region,” he said.
“The reallocation of part of our shareholding to local partners will support the further expansion of HZB.
“At the same time, the partial sale of our shareholding is consistent with our strategy to focus on our core banking business in Australia and New Zealand.
“Our ongoing shareholding in HZB following completion of the transaction will enable us to continue to support its development as one of China’s leading city commercial banks, and complement our relationships in the region.”
Once complete, the company expects the transaction to uplift its CET1 ratio by about 35 points on an Australian Prudential Regulation Authority (APRA) basis.
CBA expects to see post-tax gain from the sale of about $340 million
The transaction is subject to regulatory approvals and is expected to be complete by the middle of this year.
Shares were trading 2.18 per cent higher today at $95.50 each at 11:15 am AEDT.
