The Commonwealth Bank of Australia (ASX: CBA) share price is edging higher following the release of an announcement.
At the time of writing, the banking giant's shares are up slightly to $81.96.
Image Source: Commonwealth Bank
What did Commonwealth Bank announce?
This morning Commonwealth Bank provided an update on the sale of its equity interest in BoCommLife Insurance and other divestments.
According to the release, the China Banking and Insurance Regulatory Commission (CBIRC) has granted approval for the divestment of the bank's 37.5% equity interest in BoCommLife to MS&AD Insurance Group, the parent company of Mitsui Sumitomo Insurance.
Management revealed that the final sale proceeds are expected to be $886 million and the divestment of the equity interest in BoCommLife is expected to complete by 31 December.
Non-cash gain revisions.
Commonwealth Bank also announced that it has revised the calculation of non-cash gains and losses on disposal of previously announced divestments. This includes BoCommLife, CFS, CFSGAM, CommInsure Life and Ausiex.
The revisions include the finalisation of accounting adjustments for goodwill, foreign currency translation reserve recycling, and updated estimates for transaction and separation costs.
The total increase in unaudited post-tax statutory earnings related to the completion of BoCommLife and other divestments is expected to be approximately $840 million. This will be recognised as a non-cash item in the first half result.
Management advised that the capital impact of these divestments is a pro-forma uplift to its Common Equity Tier 1 (CET1) ratio of 29 basis points. This is based on its risk weighted assets as of 30 September.
Finally, it explained that the completion of the divestment of CommInsure Life is now currently expected to occur via a statutory asset transfer in the second half of FY 2021. As a result, the completion of the BoCommLife divestment does not affect the completion timing of the CommInsure Life divestment.
