Commonwealth Bank expects to add around A$400 million to its common equity tier 1 capital ratio, a nine basis point increase, from the sale of CommInsure General Insurance.

CBA announced yesterday that it has entered into an agreement to sell CommInsure to South African insurer Hollard Group in a deal worth $625 million upfront plus deferred payments and ongoing commissions.

CBA has entered into a 15-year strategic alliance with Hollard for the distribution of home and motor vehicle insurance products to CBA retail customers. Hollard has committed to invest in the business.

CBA chief executive Matt Comyn said in a statement: “CBA and Hollard will co-invest in innovative, market-leading product and services that anticipate and meet the changing needs of our customers.”

CBA said the transaction would result in an estimated post-tax gain of around $90 million, which includes estimated post-tax separation and transaction costs of around $130 million.

With CBA now at the end of its big asset sell-off, most sales have gone to foreign buyers. CommInsure Life was sold to Hong Kong life insurer AIA Group; the wholesale arm of CommSec, Ausiex, was sold to Nomura Research Institute; and Colonial First State Global Asset Management was sold to Japan’s Mitsubishi UFJ Trust and Banking Corp.

It sold 55 per cent of Colonial First State to US private equity firm KKR.

CBA’s 37.5 per cent stake in BoCommLife was sold to MS&D Insurance Group, which is the parent of Mitsui Sumitomo Insurance and its 80 per cent stake in Indonesian life insurer PT Commonwealth Life was sold to PT FWD Life Indonesia.

Local transactions include the sale of Count Financial to Count Plus and the merger of Aussie Home Loans with online lender Lendi, with CBA owning 45 per cent of the merged entity.