CBA seals next phase in divestment of CommInsure to AIA

Bank edges closer to finalisation of sale

CBA seals next phase in divestment of CommInsure to AIA

Insurance News

By Bethan Moorcraft

The Commonwealth Bank of Australia (CBA) has completed another phase of the divestment of its life insurance business, CommInsure, to AIA Group.

On September 30, the CBA received a payment of AU$450 million, taking the bank’s total earnings from the sale up to approximately AU$2.3 billion to date. That total sum, according to a ShareCafe report, can be broken down into AU$2.1 billion of cash payments from AIA, plus approximately AU$240 million of dividend payments in excess of the profits of CommInsure Life.

Last week’s instalment of AU$450 million will result in a pro forma increase to the CBA’s Common Equity Tier 1 ratio of eight basis points at June 30, the bank announced in a statement to the ASX.

“As the earnings impact of the CommInsure Life divestment was largely recognised in FY20 when CommInsure Life was deconsolidated for accounting purposes, the impact of the receipt of the additional proceeds on the Group’s FY21 earnings is not material,” the CBA said.

The latest proceeds also take the CBA much closer to the CommInsure divestment finish line. The bank announced that it expects to receive the final payment of approximately AU$100 million via a statutory asset transfer before June 2021.

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