ABC Announces $ 6 Billion Buyout | Money management


Commonwealth Bank of Australia has announced a $ 6 billion buyout, the largest of the Big Four banks to date, as it reports annual results.

In a statement to the Australian Securities Exchange (ASX), the company said the off-market buyout was decided on the basis of the capital generated by the strategic disposals, the level of future organic capital generation, the expected disposal proceeds and the size of the postage credit. surplus.

The divestitures, which included BoCommLife and CommInsure Life, had generated $ 6.2 billion since 2018, the company said. Additional proceeds were expected from the majority sale of Colonial First State and the divestment of CommInsurance General Insurance later this year.

He also noted that the CBA was able to adequately absorb any potential stress and had a strong capital and balance sheet.

The buyback would be carried out through an off-market tender that would start for eligible shareholders on August 30 and end on October 1.

The buyout compared to that of $ 2.5 billion by NAB and $ 1.5 billion by ANZ.

There would also be a dividend of $ 2.00 per share, fully franked, which would bring the annual dividend to $ 3.50, which the bank said was 71% of its cash income.

Net profit after tax was $ 8.8 billion, up 19.7%, while operating profit was $ 24.1 billion, up 1.7 %.

Retail banking net income after tax rose 16%, from $ 2.6 billion at the end of June 2020 to $ 4.8 billion.

Managing Director Matt Comyn said, “Looking ahead, we anticipate the economic impacts and the pressure on current earnings from lower interest rates. We will continue to invest in the company to strengthen our product offering to our residential and professional customers and extend our digital leadership ”.

Meanwhile, the partnership with AIA Australia for the partial transfer of Commonwealth Financial Planning, announced at the end of July, was to represent an after-tax loss of $ 52 million. This is the result of the depreciation of assets at fair value less costs to sell.

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