CBA result meets muted response
(17 August 2004 – Australia) Commonwealth Bank posted a net profit of A$2.57 billion for the year ended June 30, an increase of 28 percent on the previous year.
The result took into account the $535 million the bank spent on its three year Which new Bank transformation program.
However, the result gained a muted response from the market with analysts doubting the bank’s program would continue delivering savings over the next two years, with some downgrading the bank’s stock from buy to neutral.
Losing key executives over the past few years, such as Michael Ullmer, who was unveiled as National Australia Bank’s new CFO last week, was cited as detracting from the bank’s ability to continue boosting revenues in 2005 and 2006.
CBA plans to shed some 3,700 jobs by 2006 as part of the program. The bank said it had surpassed its savings target of $200 million in the first year by $37 million.
CBA chief executive, David Murray, said Which new Bank had made "measurable progress" in all the key customer, people and process initiatives.
"Our peoples’ willingness to change, their enthusiasm for the task ahead and their service commitment to our customers are the main drivers of this progress.
"However, we are not becoming complacent. 2004/2005 is an important year, focused on delivering some core components of the program, and as we do so, the service experience of our customers will improve," Murray said.
"From the front line to the executive ranks, there is strong team work and a single focus on delivering on our Which new Bank customer service vision," Mr Murray noted.
Murray described the 2004 result as "very good" and that the effect of the slowdown in housing on CBA, the country’s biggest housing lender, had been muted.
"There has been solid growth in the underlying profit as a result of significant business progress, good margin management and productivity improvements in banking, funds management and insurance," he said.
However, the result gained a muted response from the market with analysts doubting the bank’s program would continue delivering savings over the next two years, with some downgrading the bank’s stock from buy to neutral.
Losing key executives over the past few years, such as Michael Ullmer, who was unveiled as National Australia Bank’s new CFO last week, was cited as detracting from the bank’s ability to continue boosting revenues in 2005 and 2006.
CBA plans to shed some 3,700 jobs by 2006 as part of the program. The bank said it had surpassed its savings target of $200 million in the first year by $37 million.
CBA chief executive, David Murray, said Which new Bank had made "measurable progress" in all the key customer, people and process initiatives.
"Our peoples’ willingness to change, their enthusiasm for the task ahead and their service commitment to our customers are the main drivers of this progress.
"However, we are not becoming complacent. 2004/2005 is an important year, focused on delivering some core components of the program, and as we do so, the service experience of our customers will improve," Murray said.
"From the front line to the executive ranks, there is strong team work and a single focus on delivering on our Which new Bank customer service vision," Mr Murray noted.
Murray described the 2004 result as "very good" and that the effect of the slowdown in housing on CBA, the country’s biggest housing lender, had been muted.
"There has been solid growth in the underlying profit as a result of significant business progress, good margin management and productivity improvements in banking, funds management and insurance," he said.
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