Commonwealth Bank to Sell Stake in Wealth Management Arm to KKR
By Alice Uribe
SYDNEY--Commonwealth Bank of Australia has agreed to sell a 55%
stake in its wealth management arm Colonial First State to global
investment firm KKR & Co. Inc. as it moves to simplify its
The bank, Australia's biggest by market value, said the
transaction implies a total valuation for CFS of 3.3 billion
Australian dollars (US$2.1 billion). CBA expects to receive cash
proceeds of approximately A$1.7 billion from KKR.
On Wednesday, the bank reported an unaudited net profit of about
A$1.3 billion Australian in the three months through March. No
comparable figure was released, but it represents a drop of about
26% from the A$1.75 billion profit reported a year ago.
Cash earnings--the measure followed by analysts that strips out
items including hedging volatility and losses or gains on
acquisitions and asset sales--totalled A$1.3 billion.
The bank also lifted its provisions amid the ongoing Covid-19
pandemic, adding an additional loan loss provision of A$1.5
billion. Total provisions now stand at A$6.4 billion, representing
a coverage ratio of 1.65% to total credit risk weighted assets.
Write to Alice Uribe at firstname.lastname@example.org
(END) Dow Jones Newswires
May 12, 2020 19:29 ET (23:29 GMT)
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