Commonwealth Bank of Australia has announced it is set to list its Colonial First State Global Asset Management business in a deal that industry insiders predict could be worth A$4bn ($3.1bn).
The Commonwealth Bank intends to float its investment management business Colonial First State Global Asset Management (CFSGAM) on the Australian Securities Exchange (ASE), following the recommendations of an internal review launched last September.
The IPO is scheduled to be listed by the end of the year. The wealth arm of the bank currently has $219bn of assets under management.
The IPO decision comes at a time when several of Australia’s major banks, the “big four” plus AMC, are under intense pressure for a nation-wide scandal whereby the companies misled, or miss-sold to, upwards of 300,000 customers.
Shareholder value
In a statement issued today, CBA said: “In making our assessment, we examined long-term Commonwealth Bank shareholder value and also considered the ability of CFSGAM to serve the interests of its clients, attract and retain key personnel and better grow its business.
“While CFSGAM has achieved significant growth, scale and diversification under the current ownership structure, the strategic review determined that an independent ownership model would provide greater benefits.
The statement continued, “Accordingly, Commonwealth Bank intends to pursue an initial public offering of CFSGAM on the Australian Securities Exchange (“ASX”) by the end of calendar year 2018, subject to market conditions and necessary approvals.”
