- Commonwealth Bank (CBA) sells its 10% stake in Bank of Hangzhou (HZB) for around $1.8 billion
- CBA originally invested in HZB in 2005 and said to have played a significant role in the development of the business
- The ABC expects the transaction to be completed by the middle of this year with an after-tax gain of approximately $340 million.
- It will retain a 5.57% stake in HZB until at least the end of February 2025
- Shares are trading up 2.18% today at $95.50 each
Commonwealth Bank (CBA) will sell its 10% stake in Bank of Hangzhou (HZB) for around $1.8 billion.
The company will sell the stake to Hangzhou Urban Construction & Investment Group and Hangzhou Communications Investment Group, which are entities primarily owned by the Hangzhou Municipal Government.
CBA originally invested in HZB in 2005 and said it played a significant role in the development of the business.
He will retain a 5.57% stake in HZB until at least the end of February 2025.
Chief executive Matt Comyn said the moves are part of the company’s broader strategy.
“Our collaboration has enabled HZB to become a significant player in retail, wealth management and commercial banking in the Yangtze River Delta region,” he said.
“Reallocating part of our shareholding to local partners will support HZB’s continued expansion.
“At the same time, the partial sale of our stake is consistent with our strategy to focus on our core banking business in Australia and New Zealand.
“Our continued stake in HZB after the transaction closes will allow us to continue to support its development as one of China’s leading urban commercial banks and complement our relationships in the region.”
Once completed, the company expects the transaction to increase its CET1 ratio by approximately 35 points based on the Australian Prudential Regulation Authority (APRA).
The ABC expects to see an after-tax gain from the sale of around $340 million
The transaction is subject to regulatory approvals and is expected to close by the middle of this year.
The shares were trading up 2.18% today at $95.50 each as of 11:15 a.m. AEDT.