Australia's CBA suspends wealth management and mortgage broking demerger

(Adds context on bank and its recent divestitures)

March 14 (Reuters) - Commonwealth Bank of Australia said on Thursday it had suspended preparations for the demerger of its wealth management and mortgage broking businesses in order to focus on implementing the recommendations of the Royal Commission inquiry.

However, the bank reiterated that it was still committed to "ultimately" exiting its wealth management and mortgage broking businesses.

The lender had last year unveiled plans to demerge the entire wealth management and mortgage broking arms into a separately listed new company through a share market float.

It had then sold its asset management arm to Japan's Mitsubishi UFJ Financial Group in a surprise move. The business was expected to be the crown jewel in CBA's intended market float.

Last week, Australia's largest lender had said there was still a lot of work to be done under its remedial plan to address the 76 recommendations made by a powerful inquiry into the financial sector, which had revealed widespread instances of misconduct.

Wealth managers were subjected to much scrutiny after the revelations of deceptive conduct, which included practices of charging customers for services they did not provide. AMP Ltd, the country's largest, had allegedly misled regulators for almost a decade.

CBA's first-half profit had also disappointed due to higher costs and increased scrutiny towards the bank. (Reporting by Ambar Warrick in Bengaluru Editing by Phil Berlowitz and Lisa Shumaker)

2019-03-13 23:30:52

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