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Commonwealth Bank’s profits fall 11.3%
Australia’s largest bank has seen its profits fall by 11.3 per cent, as the COVID-19 loan provisions see full-year profits fall to $7.3 billion.
Commonwealth Bank’s profits fall 11.3%
Australia’s largest bank has seen its profits fall by 11.3 per cent, as the COVID-19 loan provisions see full-year profits fall to $7.3 billion.
Despite a weaker result, Commonwealth Bank shareholders will still see a 98¢ final dividend, bringing the full year dividend to $2.98 – down 31 per cent from FY19.
Statutory net profit after tax is $9.6 billion, up 12.4 per cent, with fundamentals remaining strong with good performance and volume growth in core businesses.
Business lending was up $7 billion (5.1 per cent), home lending increased by $18.4 billion, and household deposits increased $25 billion, up 9.8 per cent.
Commonwealth Bank CEO Matt Comyn said it has been a challenging six months for many Australians, from bushfires at the start of the year, right through to the pandemic, especially for customers in Victoria.
“From our perspective, we’ve been very focused on doing what we can, which is to continue running our business as well as possible, responding and supporting to help our customers, making sure we’re consistently executing our strategy, as well as ensuring we have an even stronger balance sheet, to make sure that we’re in the best possible position to respond to a variety of different economic scenarios,” the CEO stated.
Looking forward
“We anticipate that lower credit growth and low interest rates will continue to put pressure on our revenue, requiring a focus on performance, efficiency and capital allocation,” Mr Comyn said.
Mr Comyn pointed to an uncertain economic future, as the health pandemic continues, although he pointed out that Australia is in a better position than much of the world.
“That said, we have seen a sharp economic contraction during the course of the year as a result of the pandemic. Not quite as bad as we’d first feared, but certainly the pace of recovery does look like it will be longer,” Mr Comyn said.
“Overall, we’re expecting GDP to fall by about 4 per cent over this calendar year, but to bounce back by about 2 per cent next year. Unemployment is likely to peak towards the end of this calendar year at close to 10 per cent, which is clearly a significant economic impact overall.”
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