CBA posts record full-year profit
(11 August 2011 – Australia) A record A$6.84 billion full-year cash profit was reported by the Commonwealth Bank of Australia on Wednesday, delivering a 12 percent increase from the previous year.
CBA's bumper earnings kick off what is likely to be another season of record profits by the countries big four banks. As with NAB, ANZ and Westpac, CBA emerged from the global financial crisis with fewer competitors and has since enjoyed a drop off of loan defaults as unemployment levels remain near 5 percent, helping to swell profit.
The profit for the 12 months to end-June was largely in line with market expectations of A$6.82 billion and compares to last year's profit of A$6.04 billion.
Earnings were powered by CBA's flagship retail banking arm, which sells mortgages and transaction accounts. Earnings there ran up 16 percent to A$2.85 billion, helped largely by last year's out-of-cycle interest rate hikes on its mortgage book.
Elsewhere CBA's New Zealand business continued its turnaround with a 21 percent lift in profit to A$470 million. While CBA's BankWest business swung back into the red following last year’s heavy write-downs. It returned a profit of A$463 million from a A$45 million loss last year.
Chief executive Ralph Norris has also cautioned there is nothing to suggest 'any material improvement' in the coming financial year for the banking sector which is battling subdued credit growth as competition intensifies.
'Nor is it clear what the catalyst will be for a meaningful revival in consumer and corporate confidence which is a prerequisite to stronger demand for credit,' Mr Norris said.
The latest result marks the last profit result delivered by Mr Norris who plans to retire in November after six years at the helm. Ian Narev, who heads up CBA's private and business banking arm has been named as his successor.
The profit for the 12 months to end-June was largely in line with market expectations of A$6.82 billion and compares to last year's profit of A$6.04 billion.
Earnings were powered by CBA's flagship retail banking arm, which sells mortgages and transaction accounts. Earnings there ran up 16 percent to A$2.85 billion, helped largely by last year's out-of-cycle interest rate hikes on its mortgage book.
Elsewhere CBA's New Zealand business continued its turnaround with a 21 percent lift in profit to A$470 million. While CBA's BankWest business swung back into the red following last year’s heavy write-downs. It returned a profit of A$463 million from a A$45 million loss last year.
Chief executive Ralph Norris has also cautioned there is nothing to suggest 'any material improvement' in the coming financial year for the banking sector which is battling subdued credit growth as competition intensifies.
'Nor is it clear what the catalyst will be for a meaningful revival in consumer and corporate confidence which is a prerequisite to stronger demand for credit,' Mr Norris said.
The latest result marks the last profit result delivered by Mr Norris who plans to retire in November after six years at the helm. Ian Narev, who heads up CBA's private and business banking arm has been named as his successor.
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