Aus­tralia's C’wealth Bank posts record $6.6b profit

The Pak Banker - - COMPANIES/BOSS -

Aus­tralia's big­gest bank, the Com­mon­wealth, on Wed­nes­day re­ported a five per cent rise in full-year net profit to a record A$9.063 bil­lion (Dh24.3 bil­lion, $6.62 bil­lion), although re­sults slowed in the sec­ond-half. The na­tion's largest com­pany by mar­ket cap­i­tal­i­sa­tion said net profit for the year to June 30 rose from A$8.63 bil­lion the pre­vi­ous 12 months, broadly match­ing ex­pec­ta­tions.

Cash profit, the bank's pre­ferred mea­sure of earn­ings that strips out one-off costs, in­creased by five per cent to A$9.137 bil­lion.

Shares in the fi­nan­cial in­sti­tu­tion went into a trad­ing halt as it an­nounced a A$5 bil­lion cap­i­tal- rais­ing to meet tougher reg­u­la­tory re­quire­ments, which fol­lows sim­i­lar moves by the Na­tional Aus­tralia Bank and ANZ.

"Main­tain­ing a flex­i­ble and strong bal­ance sheet, in­clud­ing a strong cap­i­tal po­si­tion, con­tin­ues to be a strate­gic fo­cus for the group," chief ex­ec­u­tive Ian Narev said in a state­ment.

"We now have greater cer­tainty re­gard­ing the key re­quire­ments of global rel­a­tiv­ity and mort­gage risk weights.

"Our an­nounce­ment to­day strength­ens our po­si­tion in re­sponse to those re­quire­ments," Narev added of the cap­i­tal rais­ing.

Com­mon­wealth Bank's cap­i­tal-rais­ing is the sec­ond­largest in Aus­tralia's history af­ter NAB's Aus$5.5 bil­lion an­nounce­ment in May. ANZ an­nounced a A$3 bil­lion rights is­sue last week.

The moves fol­lowed new rules re­leased by fi­nan­cial reg­u­la­tor, the Aus­tralian Pru­den­tial Reg­u­la­tion Au­thor­ity, for the big­gest banks to hold more re­serves as a buf­fer against mort­gages - part of a global ef­fort af­ter the 2008 fi­nan­cial cri­sis.

Narev said the bank, the coun­try's largest len­der, had a long-term "pos­i­tive view" of the Aus­tralian econ­omy.

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