By Alice Uribe 
 

SYDNEY--Commonwealth Bank of Australia has agreed to sell a 55% stake in its wealth management arm Colonial First State to global investment firm KKR & Co. Inc. as it moves to simplify its business.

The bank, Australia's biggest by market value, said the transaction implies a total valuation for CFS of 3.3 billion Australian dollars (US$2.1 billion). CBA expects to receive cash proceeds of approximately A$1.7 billion from KKR.

On Wednesday, the bank reported an unaudited net profit of about A$1.3 billion Australian in the three months through March. No comparable figure was released, but it represents a drop of about 26% from the A$1.75 billion profit reported a year ago.

Cash earnings--the measure followed by analysts that strips out items including hedging volatility and losses or gains on acquisitions and asset sales--totalled A$1.3 billion.

The bank also lifted its provisions amid the ongoing Covid-19 pandemic, adding an additional loan loss provision of A$1.5 billion. Total provisions now stand at A$6.4 billion, representing a coverage ratio of 1.65% to total credit risk weighted assets.

 

Write to Alice Uribe at alice.uribe@wsj.com

 

(END) Dow Jones Newswires

May 12, 2020 19:29 ET (23:29 GMT)

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