Commonwealth Bank’s H2 profit falls to $3.3bn

year earlier. But the banks’ preferred measure - cash profit, which excludes oneoff gains and losses - rose 1.7 percent to AU$4.68 billion ($3.35 billion).

The Sydney-based bank’s operating income was down 1.9 percent to AU$12.4 billion ($8.9 billion).

Chris Weston, chief researcher at brokerage Pepper-stone§, said the result was lower than the market had expected.

Banking stocks led the Australian share market higher on Wednesday.

The banking sector enjoyed its largest gains in a decade on Tuesday after the release of a scathing report by a government-commissioned inquiry into misconduct in Australia’s banking and financial services industry.

The report’s demands for reform proved milder than the market had expected. It referred the Commonwealth Bank to regulators for investigation of 12 potential breaches of criminal or civil laws.

The bank set aside AU$121 million (87 million) in the last half for remediation of past misconduct and AU$200 million ($143 million) to cover potential costs arising from the spinoff of the Commonwealth’s wealth management and mortgage broking businesses, which is to be completed this year. (AP)