As Commonwealth struck the deal to sell the CommInsure life insurance business and its NZ equivalent, it is also weighing up the future of its Colonial First State Global Asset Management which has $219 billion in assets under management.
The sale of CommInsure and Sovereign, includes a 20-year deal for CBA to distribute AIA life insurance products in Australia and New Zealand but the deal does not include general insurance. CBA will continue to use the CommInsure brand, earning income on the distribution of life and health insurance.
Hong Kong-listed AIA is the largest independent publicly listed pan-Asian life insurance group and will become the market leader in both Australia and New Zealand with the purchase.
CBA flagged the deal in August while announcing a $9.9 billion annual profit and the sale will be recorded as a loss of about $300 million for CBA, but will release approximately $3 billion of common equity tier 1 capital.
That will lift CBA's CET1 ratio by about 0.7 per cent to 10.8 per cent, above the 10.5 per cent benchmark the Australian Prudential Regulation Authority has instructed the big banks to reach by January 2020.
Commonwealth chief executive Ian Narev says the bank is considering a range of options for insurance and the wealth management division.
"We have said for some time that while distributing life insurance is a fundamental part of that strategy, we were open to different models for doing so," Narev says.
"The combination of AIA's leading insurance capability and scale and Commonwealth Bank's broad distribution, and our complementary values and commitment to customer focus and innovation, mean that a partnership between us will create an even better experience for our customers, in a more efficient way for our shareholders."
CBA rivals ANZ and National Australia Bank have already cut their exposure to wealth management.
CommInsure was hit by controversy in 2016 after it was found to be using outdated definitions of heart attack to deny claims and was accused of pressuring doctors to reject legitimate claims.
An inquiry cleared the insurer of "systemic wrongdoing" but the scandal triggered a parliamentary inquiry and a range of ASIC reviews.
The corporate watchdog in March also cleared CommInsure of the allegations but said some practices were "out of step with community expectations".
CBA also announced that with the sale of the life insurance business, wealth management chief Annabel Srping had "decided to leave" in December after eight years with the company, to be replaced by CFO of International Financial Services, Michael Venter.
Spring is the latest CBA executive to step down in the wake of a series of scandals, including the CommInsure controversies and the recent claims of breaches of anti-money laundering laws.
Narev had his retirement announced by chair Catherine Livingstone just days after the anti-money laundering agency Austrac filed a claim in the Federal Court in early August alleging the bank breached the law more than 53,000 times.
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