BANK of Queensland has agreed to buy the St Andrew's insurance business from the Commonwealth Bank for an undisclosed sum, in what the buyer describes as "a true bolt on acquisition".
The business consists of St Andrews Insurance (Australia) and St Andrews Life Insurance.
It does not cover St Andrews' investments, superannuation, retirement income and financial planning businesses which are being integrated into the Commonwealth Bank's Wealth Management business.
The agreement is expected to complete around July 2010 subject to sale conditions, including regulatory approval.
Commonwealth Bank said the sale was not material.
The bank acquired the St Andrews insurance business as part of its acquisition of WA-based Bankwest in December 2008, and it was being integrated into CBA's insurance arm, CommInsure.
Commonwealth Bank Group Executive for Wealth Management, Grahame Petersen, said the Group had accepted the offer to purchase St Andrews insurance after an approach from BoQ.
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"St Andrews insurance largely replicates an existing insurance capability within CommInsure, and the sale avoids the complexities and costs of integrating the two insurance businesses," Mr Petersen said.
"We believe the sale is in the best interests and represents a good outcome for all parties, including existing St Andrews insurance staff, all of whom will be offered employment contracts within the BOQ Group.
"BOQ intends to operate St Andrews insurance as a standalone operation utilising existing systems and people," Mr Petersen said.
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