ANZ has reached an agreement to sell its 20 per cent stake in the Shanghai Rural Commercial Bank as part of its longer term strategy to simplify the bank’s business model.
China COSCO Shipping Corporation Limited and Shanghai Sino-Poland Enterprise Management Development Corporation Limited have agreed to purchase 10 per cent of Shanghai Rural Commercial Bank (SRCB) each, ANZ said.
The sale price of $1.84 billion represents a price–to–book ratio of roughly 1.1 times SRCB’s net assets as at December 2015, and will increase ANZ’s APRA common equity tier 1 capital ratio by around 40 basis points, ANZ said.
ANZ deputy chief executive Graham Hodges said the relationship between the two banks was “beneficial for both”, and that “the sale reflects our strategy to simplify our business and improve capital efficiency”.
“The sale will also allow us to focus our resources on our institutional banking business in Asia,” he said.
The sale is still subject to regulatory approvals and closing conditions, but is expected to be completed by the middle of 2017.