A pre-completion dividend is also expected to be received by CBA (amount subject to the timing of completion, business performance and regulatory approvals).
Chief Executive Officer, Matt Comyn, said: “The transaction is consistent with CBA’s strategy to deliver differentiated customer propositions and the best integrated digital experiences. CBA and Hollard will co-invest in innovative, market-leading products and services that anticipate and meet the changing needs of our customers.”
Group Executive Retail Banking Services, Angus Sullivan, said: “This long-term strategic alliance will bring together CBA’s number one mobile banking app and Australia’s largest branch network with Hollard’s innovative insurance products and enhanced claims technology, to deliver excellent experiences for our customers.”
Managing Director for Hollard Holdings Australia, Richard Enthoven, said: “We are incredibly excited by today’s announcement. The synergies between CBA and Hollard extend well beyond strategy and market segmentation. We have a shared vision for the future of home insurance, the potential for better customer outcomes, and an exciting role for digital innovation along our entire value chain.”
CBA financial impacts
Upon completion, the transaction is expected to deliver an increase of approximately $400m of Common Equity Tier 1 (CET1) capital, resulting in a pro forma uplift to the Group’s CET1 ratio of approximately 9 basis points, on an Australian Prudential Regulation Authority (APRA) basis, as at 31 March 2021. The Transaction is estimated to result in a post-tax gain on sale of approximately $90m, which includes estimated post-tax separation and transaction costs of approximately $130m.
Timing and conditions
Completion of the Transaction remains subject to APRA approval and is currently expected to occur in mid-calendar year 2022.
About CommInsure General Insurance
CommInsure General Insurance is a provider of home and contents and motor vehicle insurance products, with over 800,000 policies protecting CBA customers.
Established in 1999, the Hollard Insurance Company Pty Ltd is part of the Hollard International Group of companies and is an award-winning general insurer in Australia and New Zealand.
In Australia, the Hollard Group serves over 1.2 million customers and has 800 employees. Hollard underwrites a wide range of innovative insurance products including motor, home, contents, pet, and commercial insurance solutions through deep partnerships with leading Australian brands.