Commonwealth Bank shares dipped as Australia’s largest lender returned to the financial services royal commission, having confirmed the spin off its global asset management business.
All four major banks lost ground following AMP’s two-day mauling by the royal commission, with CBA posting the largest fall, down 0.5 per cent to $72.41.
AMP shares also continued to slide, dropping another 2.2 per cent to $4.45.
Australia’s largest bank has charged more fees for no service than other other financial services entity in the country, the royal commission heard on Wednesday.
“It would be the gold medallist if ASIC was handing out medals for fees for no service, wouldn’t it,” counsel assisting the royal commission Mark Costello asked.
Linda Elkins, the executive general manager of the bank’s wealth management arm Colonial First State, replied ‘yes’.
Late on Tuesday, CBA announced it would list Colonial First State Global Asset Management (CFSGAM) by the end of 2018.
CFSGAM, which is called First State Investments outside of Australia, was at the end of last year managing $219 billion of assets on behalf of institutional investors, pension funds, wholesale distributors, investment platforms, financial advisers and their clients.
Its 2017 cash profit of $191 million represented 34 per cent of CBA’s total wealth management profit, but was 17 per cent down on the previous year.
“While CFSGAM has achieved significant growth, scale and diversification under the current ownership structure, the strategic review determined that an independent ownership model would provide greater benefits,” CBA said in a statement.
The bank said an initial public offering was among its options when it announced a strategic review of the unit in September last year.
It has already sold its life insurance operations to Asia’s AIA for $3.8 billion.