Aussie Home Loans will be part of the new group, which will be listed as a separate ASX entity
In a surprise move Monday morning, CBA’s new CEO announced that the big four bank will be demerging its wealth management and broking operations. Those arms will be combined to form a new ASX-listed company called CFS Group, which will be separate from the bank’s main business.
“There will be no ownership between the Commonwealth Bank and the CFS Group when the demerger is complete and it is a separately-listed entity,” said CEO Matt Comyn, although he added that there will be transitional and service arrangements made.
In a prepared video interview, Comyn spoke of the benefits of a demerger.
“Firstly, it is a clean and timely exit of all of these businesses. I think each of them are good businesses in their own right. We think the best chance for these businesses to perform at their potential is outside the Commonwealth Bank Group,” he said.
CBA shareholders will receive a proportionate interest in the demerged entity, relative to their CBA shareholding. This allows them to either participate in the growth of the CFS group, or exit and sell their shares on the market, he added.
When asked whether the demerger was intended as a way to separate from businesses that have faced reputational damage of late, Comyn evaded the question and said these businesses have had strong performance on their own.
“Ultimately, we believe that they will perform better outside the Commonwealth Bank Group, which will also enable CBA shareholders to participate in that improved performance. We believe that focus within the Commonwealth Bank Group will enable us to become a simpler and better bank for our customers, for our shareholders and for our people,” Comyn responded.
What about Aussie Home Loans?
Aussie will also be included in the demerged group.
“It is a very successful business, over nearly 20 years, and we believe again, that the best opportunities for growth and performance from Aussie Home Loans, is inside the CFS Group, rather than inside the Commonwealth Bank Group,” Comyn said.
More to come…
Related stories:
CBA moves away from conflicted volume-based service model
