Aussie bank eyes exit from some Asian operations<\/p>\n
SYDNEY (Dow Jones): Commonwealth Bank of Australia is looking
\nfor a quick exit from its troubled Thailand and Indonesian life
\ninsurance operations in an effort to reduce its exposure to
\nSoutheast Asia.<\/p>\n
Many see the move as a precursor to CBA seeking a sale of
\nother Asian life insurance assets it acquired through the
\nColonial Ltd. acquisition in June 2000, fund managers said
\nWednesday.<\/p>\n
\"It wouldn't surprise investors if they sold off the assets
\npiece by piece,\" said Shawn Burns, a fund manager at Zurich
\nFinancial Services. \"They (Indonesia and Thailand) aren't very
\nstrong assets,\" he added.<\/p>\n
CBA's Indonesian and Thailand assets have a book value of
\naround A$55 million.<\/p>\n
Sydney-based CBA said Tuesday it is in talks with a number of
\nparties for the sale of its 50 percent joint venture holding in
\nits Bangkok-based life insurance business-Ayudhya CMG Life
\nAssurance PCL, which has been losing money since 1995.<\/p>\n
The business posted a net loss of 490 million baht in the 12
\nmonths to December 1999, which was more than double its losses
\nthe year before.<\/p>\n
Ayudhya CMG Life Assurance has said its board has approved a
\nplan to seek a delisting of its securities from the stock
\nexchange but that has been deferred until CBA can find a buyer
\nfor its stake.<\/p>\n
CBA also holds a 50 percent stake in Jakarta-based PT Astra
\nCMG Life, which it wants to divest as well.<\/p>\n
CBA's life insurance joint venture partner in Indonesia, Astra
\nInternational, also is in trouble. As Indonesia's largest car
\nmaker, it is battling stiff competition amid economic turmoil. It
\nhas total debt around US$1 billion and has said it needs to sell
\nassets to be able to make a US$200 million principal debt
\nrepayment in December next year, or be forced to return to the
\nbanks and renegotiate its payment schedule.<\/p>\n
\"The life insurance market throughout Asia is extremely
\ncompetitive, but a lot of foreign companies see it as a great
\nopportunity because of the massive populations,\" a person
\nfamiliar with the CBA negotiations said. \"But there are risk
\nissues in these embryonic markets.\"<\/p>\n
Still, the Thailand and Indonesian life insurance businesses
\nrepresent a small part of CBA's Asian business.<\/p>\n
CBA took control of the CMG funds management and life
\ninsurance assets in Hong Kong, Malaysia, Vietnam, Thailand,
\nIndonesia, the Philippines and China through its A$9.4 billion
\npurchase of Colonial.<\/p>",
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