News: CBA UPDATE 1-Australia's CBA to sell 10% stake in Bank of Hangzhou for $1.3 bln

(Adds details of deal, management comments)

March 1 (Reuters) - Commonwealth Bank of Australia (CBA) on Tuesday said it would sell a 10% stake in Bank of Hangzhou 600926.SS for about A$1.8 billion ($1.31 billion), nearly 17 years after its first investment in the China-based regional commercial lender.

CBA, the 1996-established Chinese lender's biggest shareholder, will retain its remaining shareholding of about 5.6% in Bank of Hangzhou until at least February 2025.

The completion of the deal, currently expected in mid-2022, was also estimated to bring in a post-tax gain of about A$340 million for Australia's biggest lender.

"The partial sale of our shareholding is consistent with our strategy to focus on our core banking business in Australia and New Zealand," CBA Chief Executive Officer Matt Comyn said.

Bank of Hangzhou's Chairman Chen Zhenshan said it "understands and respects the decision of CBA" to reduce the shareholding due to its own strategic considerations and capital allocation needs. ($1 = 1.3774 Australian dollars)