...AFR says CBA tumbles 4% upon sale of CommInsure. ...Insurance...

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    ...AFR says CBA tumbles 4% upon sale of CommInsure.

    ...Insurance is a lousy business IMO so it is good CBA sold it.

    ...but CBA fell not because of it, because the entire financial space is due for a fall to align with the correction taking place in US financials.

    Table as per yesterday's post

    Column 1 Column 2 Column 3 Column 4 Column 5
    0   52 wk high Fri close % Chg % Gain since Mar20 lows
    1 Australia        
    2 XFJ 6,753.90 6,674.30 -1.2% 69.6%
    3 CBA 106.57 103.69 -2.7% 79.8%
    4 ANZ 29.64 28.98 -2.2% 87.3%
    5 WBC 27.12 26.88 -0.9% 80.5%
    6 NAB 27.84 26.87 -3.5% 77.7%
    7 MQG 162.09 154.26 -4.8% 92.8%
    8          
    9 US        
    10 XLF 38.6 35.23 -8.7% 69.2%
    11 BoA 43.49 38.78 -10.8% 82.7%
    12 JPMorgan 167.44 147.92 -11.7% 64.3%
    13 Wells Fargo 48.13 41.75 -13.3% 45.5%
    14 Citigroup 80.29 67.61 -15.8% 60.5%
    15 GoldmanS 393.26 348.83 -11.3% 125.6%


    CBA sells general insurance business to Hollard Group

    Alex Gluyas
    Commonwealth Bank has entered into an agreement to sell CommInsure General Insurance to the Hollard Group.
    The deal includes establishing an exclusive 15-year strategic alliance with Hollard for the distribution of home and motor vehicle insurance products to CBA’s retail customers in Australia.
    The deal includes $625 million of upfront consideration, together with deferred payments and additional investment from Hollard throughout the 15-year alliance “to drive innovation and enhance the customer experience”.
    Upon completion, the transaction is expected to deliver an increase of around $400 million of common equity Tier 1 capital, resulting in a pro forma uplift to the group’s CET1 ratio of approximately 9 basis points, on an Australian Prudential Regulation Authority (APRA) basis, as at 31 March 2021.
    The transaction is estimated to result in a post-tax gain on sale of approximately $90 million, which includes estimated post-tax separation and transaction costs of approximately $130 million. A pre-completion dividend is also expected to be received by CBA.
    CBA will also continue to earn income on the distribution of home and motor insurance products.
    “The transaction is consistent with CBA’s strategy to deliver differentiated customer propositions and the best integrated digital experiences,” said CBA CEO, Matt Comyn.
    “CBA and Hollard will co-invest in innovative, market-leading products and services that anticipate and meet the changing needs of our customers.”
    Completion of the transaction remains subject to APRA approval and is currently expected to occur in mid-calendar year 2022.
 
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