Commonwealth Bank is selling its Colonial First State Global Asset Management (CFSGAM) business to a major Japanese bank for $4.1 billion, abandoning plans to spin off the business with its wealth and mortgage broking arms.

CBA chief executive Matt Comyn said Colonial First State's clients and staff would benefit from the sale. Credit:Peter Braig

The bank will continue with plans to demerge its wealth management and mortgage broking businesses from CBA’s core banking operations, it said in a statement to the ASX on Wednesday.

The $4.1 billion sale to Mitsubishi UFJ Trust and Banking Corporation, announced on Wednesday, came as CBA said it would hire former Westpac executive Jason Yetton to run the wealth and mortgage broking operations it is spinning off, which it is calling NewCo.

CBA said it had changed tack on Colonial First State Global Asset Management because it believed a sale of the business was in the best interests of customers, shareholders, and staff.