Record annual profits for Australia’s Commonwealth Bank
SYDNEY: Australia’s biggest bank, the Commonwealth, posted record annual profits yesterday, as its chief executive faces calls to resign in the wake of allegations the lender breached money laundering and terrorism financing laws.
The Commonwealth Bank of Australia’s profits are closely watched as it is the nation’s top lender and the results provide a guidance on the health of the economy as it transitions away from a dependence on mining.
The bank, the country’s largest firm by market capitalisation, posted a 7.6 per cent jump in annual net profit to a record A$9.93 billion (US$7.86 billion) for the year to June 30.
Cash profits, which are its preferred earnings measure, also hit a new high, rising 4.6 per cent to A$9.88 billion from the previous year, beating market expectations.
The results will be a boost for Commonwealth after the country’s financial intelligence agency AUSTRAC said it was taking civil action against CBA for alleged “serious and systemic noncompliance” of laundering and terrorism financing laws.
The bank on Tuesday said it would slash pay and bonuses of top executives, but backed chief executive Ian Narev despite calls for him to step down.
“Commonwealth Bank’s performance this year has again contributed to the financial wellbeing of our customers, shareholders, our people and the Australian economy,” Narev said in a statement Wednesday.
“This is the result of our consistent focus on customer satisfaction, innovation and financial strength.” Banking income rose by 4.3 per cent due to growth in home lending, business lending and deposit volumes, while bad debt costs fell by 12.8 per cent to A$1.1 billion.
Shareholders were rewarded with a final dividend of A$4.29 per share, up two per cent from the prior period.
“Overall, it was quite a good result with very few issues,” Regal Funds Management’s senior analyst Omkar Joshi said.
“The modest beat to expectations was driven by continued low bad debts.” Shares in CBA rose 1.04 per cent to A$81.48 in mid-day Sydney trade Wednesday. — AFP