(Yicai Global) March 2 -- Commonwealth Bank of Australia, the largest investor in Bank of Hangzhou, plans to offload a 10 percent stake in the Chinese lender for CNY8.3 billion (USD1.3 billion).

CBA will sell the stake to two companies under the Hangzhou city government, the Chinese bank said in a statement yesterday. The buyers will make a lump-sum payment.

“The partial sale of our shareholding is consistent with our strategy to focus on our core banking business in Australia and New Zealand,” CBA said in a filing to the Australian Securities Exchange.

CBA’s stake will drop to about 5.6 percent, which it pledged to keep until at least February 2025.

One of the largest commercial lenders in Australia, CBA acquired 19.9 percent of Bank of Hangzhou in 2005 for CNY625 million (USD99 million), profiting by CNY5.9 billion from the bank’s 2016 initial public offering in Shanghai, according to calculations by local financial institutions.

Shares of Bank of Hangzhou [SHA: 600926] gained 0.4 percent today to close at CNY14.61 (USD2.31) each. The stock has gained almost 14 percent since the start of the year.

Founded in 1996, Bank of Hangzhou mostly operates in Zhejiang, one of China’s most economically developed provinces. It was among the top listed banks with the highest revenue and net profit in recent years. In the first three quarters of 2021, profit soared 26.2 percent from a year earlier to CNY7 billion and revenue jumped 20 percent to CNY33.4 billion (USD3.5 billion).

CBA is also the largest shareholder of China’s Qilu Bank, another SSE-listed urban commercial lender, with a 16.1 percent stake.

Hangzhou’s finance bureau will remain de-factor controller of Bank of Hangzhou, which is based in the capital of China's eastern Zhejiang province, the bank added.

Editors: Tang Shihua, Futura Costaglione