The Commonwealth Bank has agreed to sell its 37.5 per cent stake in Chinese insurer BoComm Life Insurance to a Japanese firm.
CBA will sell its stake in BoComm Life Insurance Company to Japanese firm Mitsui Sumitomo Insurance Co for $688 million.
The sale will satisfy one of the conditions included in the sale of the CBA's Australian and New Zealand insurance businesses to AIA.
CBA chief executive Matt Comyn said the transaction would be a further step in "simplifying and focusing" the bank's portfolio.
"It follows the announcement of the proposed sale of the group’s life insurance businesses in Australia and New Zealand to AIA Group, and the strategic review of the group’s life insurance business in Indonesia,” Mr Comyn said.
The sale will be subject to the China Banking and Insurance Regulatory Commission’s regulatory approval process as well as Chinese merger clearance.
BoComm Life also plans to undertake a capital raise prior to the sale, to which the Commonwealth Bank’s pro rata contribution will be $235 million; however, this “will be separately reimbursed in full” by Mitsui Sumitomo upon completion of the sale, said CBA in a statement.