Commonwealth Bank of Australia (CBA) has agreed to sell its 37.5% stake in Chinese life insurer BoComm Life to Japan’s Mitsui Sumitomo Insurance in a deal valued at RMB3.2bn ($502.3m).

CBA said that the stake sale will result in an after tax gain of around A$450m ($340.7m).

The disposal of BoComm Life satisfies a condition of CBA’s $3bn sale of its Australian and New Zealand life insurance businesses to AIA Group, which was announced in September last year.

Commenting on the transaction, Commonwealth Bank of Australia CEO Matt Comyn said: “This transaction represents a further step in simplifying and focusing our portfolio and follows the announcement of the proposed sale of the Group’s life insurance businesses in Australia and New Zealand to AIA Group, and the strategic review of the Group’s life insurance business in Indonesia.”

Before closing of the transaction, BoComm Life is expected to undertake a capital increase, for which Commonwealth Bank’s will contribute RMB1.125bn ($176.21m), which will be separately reimbursed in full by MSI on completion of the transaction.

The proposed transaction is subject to the Chinese merger clearance, China Banking and Insurance Regulatory Commission’s regulatory approval process and completion of the BoComm Life capital increase.