CBA capital strategy up in the air

Commonwealth Bank appears ready to throw its balance sheet around in the name of generating short-term and long-term fees from the management of market-linked investments in the infrastructure arena. Commonwealth Bank said it would allocate more than $1 billion of core capital to a mooted investment by Colonial First State in a consortium preparing a bid for BAA plc, the operator of several British airports, including Gatwick. The bank's goal, according to a Colonial media release yesterday, is to “create a new infrastructure offering to complement Colonial First State Global Asset Management's current suite of infrastructure funds.” CBA did not elaborate on the strategic thinking that informs this decision to allocate capital in this way. In excess of $1 billion in capital is in excess of five per cent of CBA's capital resources of $18.5 billion.