SYDNEY, AUSTRALIA: Commonwealth Bank of Australia (CBA) has entered into a binding sale agreement to sell a shareholding of 10% in Bank of Hangzhou (HZB) to Hangzhou Urban Construction & Investment Group and Hangzhou Communications Investment Group, which are entities majority-owned by the Hangzhou Municipal Government.
Total gross proceeds expected to be received by Commonwealth Bank of Australia (CBA) following completion of the transaction are approximately $1.8 billion, a bourse filing noted.
CBA has agreed with HZB to retain its remaining shareholding in HZB of approximately 5.57% until at least 28 February 2025 (subject to certain exceptions, including if the transaction is terminated prior to completion).
CBA Chief Executive Officer, Matt Comyn, said: “CBA is pleased to have played a meaningful role in HZB’s development since our original investment in 2005. Our collaboration has seen HZB become a significant player in retail, wealth management and commercial banking across the Yangtze Delta region.
The reallocation of part of our shareholding to local partners will support the further expansion of HZB.”
“At the same time, the partial sale of our shareholding is consistent with our strategy to focus on our core banking business in Australia and New Zealand. Our ongoing shareholding in HZB following completion of the transaction will enable us to continue to support its development as one of China’s leading city commercial banks, and complement our relationships in the region.”
HZB Chairman, Chen Zhenshan, said: “The over ten years of strategic cooperation between HZB and CBA have witnessed HZB’s rapid development and growing market influence. CBA has also achieved a good return on investment, which is a win-win outcome for both parties. HZB understands and respects the decision of CBA to reduce its shareholding based on its own strategic considerations and capital allocation needs. In the future, the two parties will continue to cooperate and maintain a strong partnership.”
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