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Commbank records $1.2bn loss post-RC

  • August 08 2019
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Invest

Commbank records $1.2bn loss post-RC

By Cameron Micallef
August 08 2019

The aftermath of the royal commission has shown in the Commonwealth Bank of Australia’s end of financial year report, which revealed an $8.49-billion cash profit for the full year, down 4.7 per cent on 2018’s results.

CBA

Commbank records $1.2bn loss post-RC

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  • August 08 2019
  • Share

The aftermath of the royal commission has shown in the Commonwealth Bank of Australia’s end of financial year report, which revealed an $8.49-billion cash profit for the full year, down 4.7 per cent on 2018’s results.

CBA

Australia’s largest bank has announced that it is coughing $918 million in customer remediation, with another $358 million set aside for risk and compliance programs. This brings the total losses following the royal commission to just over $1.2 billion.

Despite the high costs headed its way, the bank’s CEO, Matt Comyn, appears positive about the bank’s position.

“The key takeaways from my perspective are we’re making very good progress on becoming a simpler and better bank,” he said.

The lower financial result was a direct result of fines implemented by commissioner Kenneth Hayne’s royal commission, the CEO did concede, and noted the 4.7 per cent drop in profit.

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“So, that cash net profit after tax is, of course, subdued, and it’s been impacted by higher remediation costs of almost $1 billion during the course of the year, as well as elevated risk and compliance spend,” Mr Comyn continued.

The market reaction

Following the announcement, the share price for CBA fell by 2 per cent and reached a low point of $77.81 per share.

The position wasn’t helped by Tuesday’s mass sell-off of Australian equities due to trade tensions between the United States and China, when the bank fell from a high of $81.24 per share to $79.41 per share.

Full year 2019 highlights for shareholders

  • Core business continued to perform well – underpinned by growth in home lending, business lending and deposits.
  • Cash net profit after tax from continuing operations of $8.492 billion (-4.7 per cent).
  • Final dividend of $4.31 per share for investors, fully franked.
Commbank records $1.2bn loss post-RC
CBA
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About the author

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Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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