Commonwealth Bank of Australia (CBA) is set to demerge its wealth management and mortgage broking business in an effort to simplify its structure and focus on its core banking operations in Australia and New Zealand.

The demerged entity will be called CFS Group and will be chaired by John Mulcahy. The bank is currently in the lookout for a CEO for the new business.

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CFS Group will include CBA’s superannuation, investment and retirement solutions unit Colonial First State, global investment management business Colonial First State Global Asset Management (CFSGAM), financial advice units Count Financial and Financial Wisdom, mortgage broking arm Aussie Home Loans, and the bank’s minority stakes in Mortgage Choice and CountPlus.

CBA said that the demerger will “unlock value for shareholders” through the creation of an independent wealth business that will be able to pursue its own growth strategies.

The latest move also results in the termination of the previously announced plans to float the CFSGAM unit.

The demerger is anticipated to be completed next year, subject to board, shareholder and regulatory approvals. The bank does not intend to hold a stake in CFS Group after the demerger.

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CBA CEO Matt Comyn said: “The wealth management and mortgage broking businesses are each high-quality franchises.

“With innovation and disruption in wealth management increasingly favouring specialist companies, they will benefit from independence and the capacity to focus on new growth options without the constraints of being part of a large banking group.”

The demerger would not impact the bank’s 20-year distribution partnership with AIA Group, which started following AIA’s acquisition of the bank’s life insurance unit. The partnership mandates AIA to continue providing insurance products to the bank’s Australian and New Zealand customers.

The AIA partnership would now extend to customers of the CFS Group. The bank also plans to retain its salaried financial advice business Commonwealth Financial Planning.

At the same time, CBA also announced plans to review its CommInsure general insurance arm and explore options to sell the business.

In a separate statement, CBA announced the appointment of Nigel Williams as the new chief risk officer, replacing David Cohen who will become deputy CEO to spearhead the demerger. Both Williams, who joins from ANZ, and Cohen will assume their new responsibilities from 5 November 2018.

In addition, the bank also appointed Pascal Boillat as the new group executive of enterprise services and chief information officer, Sian Lewis as the group executive of human resources, Andrew Hinchliff as the group executive of institutional banking and markets, and Angus Sullivan as the group executive of retail banking services.