The Commonwealth Bank is considering offloading its Indonesian life insurance subsidiary following the sale of CommInsure to the AIA Group.
The bank has announced that it will undertake a “strategic review” of its Jakarta-based PT Commonwealth Life subsidiary, which contributes $24 million to the bank’s insurance business bottom line.
In a statement on its website, CBA announced it has commenced a review and engaged external advisers to assess the prospects of a sale of the PTCL business, of which the bank is an 80 per cent equity holder.
Commenting on the announcement, Deutsche Bank research analyst Anthony Hoo said the sale of the business is in line with indications given previously about the bank’s strategic direction.
“While PTCL is a small contributor and this won’t move the dial on group returns, a divestment would make sense given CBA’s agreement in September 2017 to sell its life business in Australia and New Zealand,” Mr Hoo wrote in an analyst’s note.
“It would also continue the broader retreat from non-core wealth and insurance operations across the sector.”
The bank announced the sale of CommInsure in September 2017 with a $3.8 billion price tag for Asian insurance giant AIA.
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