CBA full-year profit rises 3 per cent to $9.45 billion

A 6% dip in the cash profit of Commonwealth Bank’s wealth management division did not hold the bank back from recording a record after tax cash profit of $9.45 billion for the 12 months to 30 June, up 3% on a year ago.

While the cash profit was up three per cent, cash earnings per share remained flat at $5.551 a share. That compared with the A$9.5 billion mean estimate of 13 analysts surveyed by Bloomberg. The nation’s big four lenders are also facing a regulatory clampdown on mortgages to combat runaway housing prices and bracing themselves to meet demands to boost capital and liquidity.

Before it’s here, it’s on the Bloomberg Terminal.

Bad-debt charges rose 27 percent from a year earlier to A$1.26 billion, due to higher provisioning for its exposure to the resources, commodity and dairy sectors, it said.

“Income growth inside and outside Australia remains weak, so people are not feeling better off”, Mr Narev said. “When combined with ongoing global economic and political uncertainty this makes households and businesses cautious, and hesitant to respond to monetary stimulus”.

The CBA’s net interest margin eased a couple of points to 2.07% (or 2.07 cents in the dollar), but the cost to income ratio dipped 40 points to an efficient 42.4% (or 42.4 cents in the dollar).

Last week, the Reserve Bank slashed the official cash rate by 25 basis points to its lowest level ever, but the major banks caused a political furore by failing to pass on the full cut to borrowers.

At first glance no shocks or surprises in the annual results from the Commonwealth Bank this morning – dividend is flat on a year ago with the payment of a final of $2.22 a share making for a full year figure of $4.20 a share.

On Tuesday, No.4 ANZ posted a small drop in nine-month cash profit but investors cheered the lender’s commitment to shrink in Asia and refocus on the domestic market.

The benchmark ASX/S&P 200 was down 0.50 per cent at 1200 AEST on Wednesday with the major banks largely in negative territory. National Australia Bank Ltd. reports its quarterly update August 15.

“The hearings will provide an open and transparent environment in which to address issues related to the banking system”, Coleman said in a statement.