The Commonwealth Bank of Australia (ASX: CBA) share price has opened strongly, climbing more than 1.4% since market open.
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Why is the CBA share price lifting?
The S&P/ASX 200 Index (ASX: XJO) is up 0.5% to 6,666 points to start the day after Wall Street climbed higher overnight on COVID-19 vaccine news.
The CBA share price is lifting in early trade after a key announcement at the stroke of the bell. Broad market positivity alongside the announcement has helped boost the ASX bank share higher.
Australia's largest bank announced it would merge Aussie Home Loans with Lendi, a leading online home loan platform. The merger will see Aussie's strong brand name and significant network with Lendi's market-leading technology and existing platform.
CBA acquired 100 per cent of Aussie back in August 2017 and has steadily grown the book in subsequent years. CBA will retain a 45% shareholding in the combined business with Lendi to take the remaining 55% stake. The bank will receive deferred consideration and a pre-completion dividend of $105 million in aggregate.
CBA CEO Matt Comyn said the business will offer "enhanced digital capabilities" for Aussie brokers with an improved customer experience. Lendi CEO and co-founder David Hyman was similarly bullish, hoping the merger will "drive even stronger outcomes for more homeowners and brokers alike".
The proposed merger is subject to ACCC approval and other conditions, with completion expected by mid-calendar year 2021.
The CBA share price has reacted positively with the Aussie bank leading the way with a 1.48%% gain this morning. Shares in the other Big Four banks are also up with Australia and New Zealand Banking GrpLtd (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB) also gaining strongly.
Foolish takeaway
The Lendi merger has helped boost the CBA share price higher in early trade as the bank looks to sell down its stake in the mortgager broker business.
