(Australia) – Australia’s second-ranked Commonwealth Bank of Australia (CBA) wrote down the value of its Colonial First State funds management arm by a lower-than-expected A$426 million in its interim results.The Colonial writedown, which some analysts had tipped could come in as high as A$2 billion, was largely behind a 48 percent fall in the CBA result, which came in at A$622 million for the six months to end-December.
On a cash basis, profit was up 1 percent to A$1.208 billion against the same period the previous year.
The CBA result, however, was overshadowed by the furore over the A$33 million final pay-out to former Colonial chief Chris Cuffe, who has been poached to head the Kerry Packer-dominated Challenger group.
Cuffe defended his pay-out, saying it had been performance-based and he deserved it, but rubbed salt into the wounds by luring several of his Colonial colleagues across to Challenger at the height of the controversy.
CBA chief executive David Murray admitted that in retrospect, the bank has paid too much when it paid A$9 billion for Colonial in 2000.