Australia’s biggest bank yesterday announced a major shake-up, offloading its Australian and New Zealand life insurance business to AIA Group Ltd for A$3.8 billion (US$3 billion), while reviewing the future of its global asset management arm.
Troubled lender Commonwealth Bank of Australia (CBA) is under a cloud as it faces legal action over alleged breaches of money laundering and terror financing laws, and has also been beset by a scandal over poor financial planning advice.
Its life insurance division, CommInsure Life, had also come under scrutiny over allegations of claims being denied, although the bank was later cleared by corporate watchdog the Australian Securities and Investments Commission.
CBA said the sale of CommInsure and Sovereign Assurane Co Ltd would make the Hong Kong-listed AIA the life insurance market leader in Australia and New Zealand.
The deal included a 20-year right for CBA to distribute the pan-Asian life insurance firm’s products in Australia and New Zealand, with customers retaining their current benefits under existing policies.
In a separate announcement, the bank — Australia’s largest firm by market capitalization — said it could also spin off its global asset management business.
Colonial First State Global Asset Management, which is known outside the country as First State Investments, manages about A$219 billion.
The sale to AIA, which already has insurance businesses in Australia and New Zealand, would see the lender book an after-tax loss of A$300 million, CBA chief executive Ian Narev said .
“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,” he said.
The acquisition and 20-year partnership would “strengthen AIA’s protection market leadership and expand our distribution capabilities in these markets,” AIA group chief executive Ng Keng Hooi (黃經輝) said.
AIA, the largest independent publicly listed pan-Asian life insurance group, operates in 18 markets across the Asia-Pacific region.
CBA’s move came after Australia’s financial intelligence agency, AUSTRAC, last month launched a civil case against the lender, alleging “serious and systemic non-compliance” of the laws involving thousands of transactions.
A global shareholder class action is also in the works, with the case overshadowing record annual profits of A$9.93 billion in the year to June 30.
The scandal forced the bank to announce the retirement of its chief executive, and slash pay and bonuses to top management.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to