The Commonwealth Bank of Australia has announced today that it has appointed a CEO and CFO for its “demerged” wealth management and mortgage broking businesses.
The former managing director and chief executive of online marketplace lender SocietyOne, Jason Yetton, is to lead the “NewCo”, which includes Aussie Home Loans; CBA’s minority shareholdings in ASX-listed companies CountPlus and Mortgage Choice; Colonial First State; Count Financial; and Financial Wisdom.
Colonial First State Global Asset Management (CFSGAM) will no longer form part of the new company, as it is being sold to Mitsubishi UFJ Trust and Banking Corporation for a total cash consideration of $4.13 billion.
Mr Yetton, who had been CEO and managing director of SocietyOne for two years, has previous experience from Westpac and BT Financial Group, and has also been group executive of Westpac retail and business banking.
Meanwhile, CBA’s current chief financial officer of wealth management, Andrew Morgan, will become CFO of "NewCo".
Prior to this, Mr Morgan was CFO for business and private bank and Bankwest at CBA.
He has over 25 years’ experience in the financial services and property sectors, including at Lend Lease Corporation, National Australia Bank, Radian and Perpetual.
The appointments will take effect from 1 December 2018, and they will reportedly follow “a thorough global and local search”.
CBA chief executive Matt Comyn said: “The appointments bring an important mix of external and internal experience, as well as a deep understanding of wealth management and financial services, to lead the new entity.
“Jason is an accomplished leader, with deep wealth management and broad financial services experience. He is well positioned to lead NewCo and will be strongly supported by Andrew.
“These appointments, effective 1 December 2018, will help drive NewCo’s strategy and future potential.”
The demerger of the company is subject to shareholder and regulatory approvals under a scheme of arrangement.
If approved, the demerger is now expected to complete in late calendar year 2019.
Mr Yetton’s appointment is also subject to regulatory approvals, including any applicable APRA registration requirements.
With today’s announcement regarding the agreement to sell CFSGAM, the candidate non-executive directors that had been identified for NewCo will no longer continue in their positions, Mr Comyn said.
“I thank John Mulcahy and the other candidate directors for their contributions during this time. Under John’s leadership, they have played an important role in achieving the successful sale outcome for CFSGAM. A new board for NewCo will be established in advance of the proposed demerger,” the CBA CEO added.
Speaking of the decision to sell, Mr Comyn said: “CFSGAM is a high-quality business that has achieved strong growth under CBA’s ownership for over 18 years. MUTB is one of the largest asset managers in Japan, with a long history and deep capabilities.
“We believe that CFSGAM’s clients and employees will benefit from MUTB’s supportive long-term ownership.
“Today’s announcement represents another important milestone in CBA’s strategy to focus on its core banking businesses and to create a simpler, better bank. The sale of CFSGAM to MUTB represents significant value for CBA shareholders and is a positive outcome for CFSGAM clients and employees.”
The estimated total proceeds imply a post-tax gain on sale of approximately $1.5 billion, the big four bank revealed, which includes estimated post-tax separation and transaction costs of approximately $100 million.
The transaction is subject to a number of regulatory approvals in various jurisdictions including Australia, Japan, Hong Kong, Singapore, the United Kingdom and the United States, and it is expected to complete mid-calendar year 2019.
CBA said that, upon completion, the transaction is expected to deliver an increase of approximately $2.9 billion of common equity Tier 1 (CET1) capital, resulting in a pro forma uplift to the group’s FY18 CET1 ratio of approximately 60 basis points on an APRA basis as at 30 June 2018.
MUTB president and CEO Mikio Ikegaya said: “We are delighted that CFSGAM, a highly distinguished, diverse and growing asset manager, is joining our group. We expect CFSGAM will continue to deliver leading investment solutions to its existing global client base.
“We also believe CFSGAM’s highly seasoned investment teams and competitive product line-ups will enable us to deliver new investment opportunities to our clients. We look forward to welcoming the full CFSGAM team to our group.”
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.
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