CBA boss upbeat as profits jump

COMMONWEALTH Bank shares have rallied to their highest level in more than four years after the heavyweight mortgage lender outstripped market expectations with its first-half results.

And chief executive Matt Comyn has delivered an upbeat prognosis on the Australian economy, saying strong fundamentals will soon temper headwinds such as bushfires and the coronavirus outbreak.

The bank yesterday reported a net profit for the six months to December of $6.16 billion, the equivalent of almost $33.5 million a day.

That was up 34 per cent from the same period a year earlier, fuelled by a gain on the sale of Colonial First State Global Asset Management.

Cash profit, a measure of underlying profit that is closely watched in the industry, was $4.48 billion.

While that tally was down 4.3 per cent from a year earlier, it was above market expectations.

On the national outlook, Mr Comyn said that while Australia’s Gross Domestic Product would likely take a short-term hit, the economy was “underpinned by good long-term fundamentals”.

“Clearly, in the near term, we’ll (have) to deal with the impact from the drought, the bushfires and now global uncertainty around the coronavirus,” he said in a presentation.

“We do expect that that’s going to weigh on both sentiment as well as GDP in this quarter and in the next … but we think the combination of both the recovery and rebuild, and also some of the underlying strength in the Australian economy, will start to come through in the back half of this calendar year.”

The CBA’s home lending rose 4 per cent in its first half compared with the same period a year earlier, outpacing the industry average.

Shares in the group rallied 4.1 per cent, their biggest single-session jump since May, after the results were released yesterday.