Commonwealth Bank of Australia (CBA), the nation’s largest lender, announced it is selling a $1.31 billion stake in Bank of Hangzhou. Selling the stake, worth around 10% of the Chinese bank, is the start of CBA’s exiting of a nearly two-decade-old investment due to current market pressures, reports Reuters. CBA, the Chinese lender’s biggest shareholder, will retain its remaining shareholding of about 5.6% in Bank of Hangzhou until at least February 2025.
CBA said it would sell down its shareholding to entities controlled by the Hangzhou municipal government, advancing a strategy that has been adopted by most Australian retail banks to do away with non-core operations and focus on essential services at home.
China’s banking and insurance sectors have, meanwhile, been under pressure from their non-performing assets since problems of debt-laden developer China Evergrande Group came to light last year.