CBA puts demerger of wealth and mortgage broking business on hold

Marco Green
March 16, 2019

CBA said it is focussing on implementing the recommendations from Commissioner Kenneth Hayne, paying back customers and addressing legacy issues within the bank.

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The Commonwealth Bank has suspended plans to spin off its wealth management arm following weeks of speculation it had become too small to achieve the necessary scale. ANZ Bank is also aiming to sell its superannuation business to IOOF, though this has been delayed by regulatory action, while Westpac remains the most committed to remaining in the sector.

It is the latest change of plans by CBA, which a year ago cancelled the previously announced IPO of its Colonial First State Global Asset Management business to bundle it with Colonial First State, Count Financial and Financial Wisdom - plus Aussie Home Loans - as CFS Group for demerger and a separate listing.

$610m already paid to customers or provisioned, for refunds (including interest) to address issues relating to advice quality, fees where no service was provided in the Advice business, Credit Card Plus, CommInsure Life Insurance and Loan Protection Insurance, and banking fees and interest.

CBA is spending A$1.46bn on refunding customers and remediating issues linked to misconduct, with A$1.2bn of this related to its wealth businesses.

"We are working to complete this work quickly and accurately", CBA said.

Other reports by Click Lancashire

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