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CBA severs Colonial First State ties with $4.2bn sale

By Grace Ormsby · August 06 2019
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Colonial First State
CBA severs Colonial First State ties with $4.2bn sale

CBA severs Colonial First State ties with $4.2bn sale

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By Grace Ormsby · August 06 2019
Reading:
egg
egg
egg
Colonial First State

The Commonwealth Bank of Australia has finalised the divestment of its Colonial First State business offering to a Japanese bank.

Under the sale, Colonial First State Global Asset Management is purchased by Mitsubishi UFJ Trust and Banking Corp for $4.2 billion, subject to completion adjustments, a statement from CBA said. 

The announcement of the sale completion “represents an important milestone towards executing CBA’s strategy to become a simpler, better bank”, according to the bank’s CEO Matt Comyn. 

The total consideration for the purchase price represents a multiple of 19.4 times Colonial First State’s unaudited pro forma FY19 net profit after tax of $218 million as well as a post-tax gain on sale of approximately $1.5 billion. 

CBA said the transaction is expected to deliver an increase of more than $3 billion of common equity tier 1 (CET1) capital, which will result in a pro forma uplift to the group’s CET1 ratio of 68 basis points on an APRA basis, as based on the group’s risk weighted assets. 

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