(13 August 2010 − Australia) The Commonwealth Bank has flagged a possible out of cycle rate rise may be on the cards for the bank’s 11 million customers.The news comes after the bank posted a record annual profit of A$6.1 billion, up A$1.8 billion on the last financial year.
The bank’s profit statement indicates that the bank’s customers were charged A$1.36 billion in home loan, consumer finance, retail deposit and distribution fees, and across the whole range of CBA’s services fees totalled A$3.4 billion.
Income from home loan interest surged to A$2.21 billion, up 41 percent and interest from credit cards and person loans also increased 19 percent to A$1.14 billion.
After expenses and tax, profit from the retail division was A$2.46 billion, up 17 per ent or A$354 million.
The bank’s chief executive officer Ralph Norris said that a likely increase in funding costs meant this division was facing a decline in its interest margin of about 0.4 percentage points over the next year.
That mightn’t sound like much, but it equates to about a fifth of the bank’s interest margin, Mr Norris pointed out.
At some stage the bank may well have to pass something on to customers, Mr Norris acknowledged.