OPINION: After a more than two-year wait for approval to sell a stake in a small Chinese life insurance business, it took just four months for China to OK CommBank’s latest sale.
CBA’s sale of its 10 per cent shareholding in Bank of Hangzhou Co was also subject to the approval of the CBIRC and the repatriation of the $1.8 billion was subject to approval by SAFE.
Trying to work out why the CBIRC was so speedy in its approval of the sale of the stake Bank of Hangzhou Co and so slow in approving the BoComm Life sale is tricky for a number of reasons.Second, Chinese regulatory settings are often used as a tool for executing strategic diplomatic policies.The sale of the holding in BoComm Life was to a Japanese buyer, a factor that could have caused the Chinese authorities some angst, given Japan’s strong military alliance with the United States.
The CBIRC approval was only one part of the approval process. CBA was concerned the approval by SAFE to repatriate the $1.8 billion proceeds of the sale would take at least three months. But the transaction, which was large in proportion to total monthly foreign exchange movements, was approved within 10 days of the money being deposited in the CBA bank account.
CBA told the ASX on Monday the Bank of Hangzhou transaction delivered a pre-tax gain of $516 million which was recognised in the group’s cash net profit before tax and included within other banking income.is the Chanticleer columnist. He has more than 35 years' experience as a finance journalist.
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