Commonwealth Bank of Australia (CBA) has sealed a deal to divest its remaining 5.45% stake in Bank of Hangzhou (HZB) to Recent China Life Insurance (NCI).

The deal is anticipated to generate around A$940m ($593m) in gross proceeds for CBA.

Bank of Hangzhou, arrange in September 1996 and situated in Zhejiang province, China, is publicly traded on the Shanghai Stock Exchange.

Upon completion, the sale is projected to boost CBA’s Common Equity Tier 1 (CET1) ratio by an estimated 18 basis points, in accordance with the Australian Prudential Regulation Authority’s standards.

This calculation is predicated on the Group’s risk-weighted assets as of 30 September 2024.

CBA CEO Matt Comyn said: “CBA has been a longstanding shareholder of HZB since its original investment in 2005, and we’re pleased to have contributed to the event of HZB into a major player in retail, wealth management and business banking across the Yangtze Delta region.”

The finalisation of the sale is contingent upon various conditions, including approval from the National Financial Regulatory Administration, a confirmation opinion from the Shanghai Stock Exchange, and the registration of the share transfer by the Shanghai Branch of China Securities Depository and Clearing Corporation Limited.

This transaction is predicted to be finalised around mid-2025, provided these conditions are met.

Recent China Life Insurance, established in 1996, is predicated in Beijing. It has Central Huijin Investment, a state-owned entity, and China Baowu Steel Group as primary shareholders.

In October 2024, In CBA divested an extra 10% stake in Vietnam International Industrial Joint Stock Bank (VIB).

“CBA to dump remaining stake in Bank of Hangzhou” was originally created and published by Retail Banker International, a GlobalData owned brand.

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