Commonwealth Bank of Australia (CBA) has sold its remaining 5.45% stake in Chinese bank Bank of Hangzhou Co. (HZB) to Chinese life insurance company New China Life Insurance Co. (NCI).
CBA, Australia’s largest company, said the sale would realise gross proceeds of about A$940 million and be completed in mid-2025, subject to the satisfaction of some conditions.
Chief Executive Officer Matt Comyn said CBA had been a shareholder of HZB since 2005 and was pleased to have contributed to its development into a significant player in retail, wealth management and commercial banking across the Yangtze Delta region.
The transaction was expected to deliver a pro forma uplift to CBA’s tier one common equity ratio of about 18 basis points on an Australian Prudential Regulation Authority basis, based on risk weighted assets of 30 September 2024.
CBA sold 10% of HZB on 1 July 2022 to Hangzhou Urban Construction & Investment Group Co. and Hangzhou Communications Investment Group Co., which are majority-owned by the Hangzhou Municipal Government.
The conditions of completion include approval from the National Financial Regulatory Administration, a confirmation opinion from the Shanghai Stock Exchange and registration of the share transfer by the Shanghai Branch of China Securities Depository and Clearing Corporation Limited.
At 3 pm AEDT (4 am GMT) shares in HZB (SHA: 600926) were trading at ¥ 14.76, up ¥17 (1.17%), and capitalising the bank at ¥ 88.26 billion (US$12.35 billion).
Shares in NCI (SHA: 601336) were ¥ 0.93 (1.92%) down at ¥ 47.63, giving it a market capitalisation of ¥ 125.07 billon.
CBA shares were A$1.03 (0.65%) higher at $159.68, capitalising the largest of Australia’s Big Four banks at $261.18 billion (US$161.93 billion).