Australia's biggest bank Thursday announced the sale of its Australian and New Zealand life insurance business to AIA for Aus$3.8 billion (US$3.0 billion), while also considering the future of its global asset management arm.

The Commonwealth Bank said the sale of CommInsure Life and Sovereign to the Hong Kong-listed firm included a 20-year deal for it to distribute AIA life insurance products in Australia and New Zealand.

In a separate announcement, the bank -- the country's largest firm by market capitalisation -- said it may also spin off its global asset management business.

Colonial First State Global Asset Management, which is known outside the country as First State Investments, manages around Aus$219 billion.

Chief executive Ian Narev said the sale to AIA, which already has insurance businesses in Australia and New Zealand, would make the pan-Asian giant the market leader.

"We have said for some time that while distributing life insurance is a fundamental part of that strategy, we were open to different models for doing so."

AIA group chief executive Ng Keng Hooi said the acquisition and the 20-year partnership "will strengthen AIA’s protection market leadership and expand our distribution capabilities in these markets".

The Commonwealth's move comes with the troubled lender facing legal action over alleged breaches of money laundering and terror financing laws.

The case overshadowed record annual profits in August and forced the bank to announce the retirement of its chief executive.

source: AFP