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