CBA Chief Executive Officer Matt Comyn said: “Today’s announcement represents an important milestone towards executing CBA’s strategy to become a simpler, better bank. The sale of CFSGAM to MUTB creates significant value for CBA shareholders and is a positive outcome for CFSGAM clients and employees.”
The final sale proceeds are $4.2 billion, subject to completion adjustments. The total consideration represents a multiple of 19.4x CFSGAM’s unaudited pro forma FY19 net profit after tax of $218 million[1] and a post-tax gain on sale of approximately $1.5 billion.[2]
The transaction is expected to deliver an increase of approximately $3.1 billion of Common Equity Tier 1 (CET1) capital, resulting in a pro forma uplift to the Group’s CET1 ratio of 68 basis points on an APRA basis, based on the Group’s risk weighted assets as at 31 March 2019.
[1] Based on CFSGAM FY19 unaudited cash earnings of $240m, adjusted to account for the allocation of central expenses and removal of one-off items.
[2] Inclusive of separation costs and subject to final tax calculations and completion adjustments.