Compliance and compensation drag on CBAs profit
(6 February 2019 – Australia) Commonwealth Bank posted a $4.7 billion profit in the six months to December, falling short of market expectations due to compensation and compliance spending.
Operating income slipped 1.9 per cent to $12.4 billion, and CBA said its spending on risk and compliance remained "elevated," pointing to ongoing costs in response to its anti-money laundering scandal, and previously-disclosed provisions for past misconduct.
CBA also revealed its cumulative spending on remediation and related programs over recent years had hit $1.46 billion, a figure that includes compensation for fee errors, poor advice and dodgy insurance.
The bank said it would respond to the weaker business environment by reigning in other costs, targeting a cost-to-income ratio of less than 40 percent, compared with 42.6 percent currently.
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