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Commonwealth shines in ‘difficult’ environment
Despite its three biggest rivals recording double-digit losses, Australia’s largest bank has grown by 5 per cent in the first quarter to 30 September.
Commonwealth shines in ‘difficult’ environment
Despite its three biggest rivals recording double-digit losses, Australia’s largest bank has grown by 5 per cent in the first quarter to 30 September.
CBA reported unaudited cash net profit from continuing operations of approximately $2.3 billion, with operating income up 3 per cent.
CBA CEO Matt Comyn said the bank performed well in a difficult environment undermined by uncertain economic conditions and record-low interest rates.
“Our strong capital position and balance sheet setting means we are well placed to meet the needs of our customers, illustrated by good volume growth in our core markets of home loan lending, business lending and household deposits,” Mr Comyn said.
While the results were stronger than the other big four banks, CBA benefited from the absence of any extra remediation charges – something that may not be repeated in 2020.
Operating expenses fell by 9 per cent because high compensation costs were not repeated, while operating costs excluding notable items rose by 2 per cent.
Mr Comyn has warned that profit margins would continue to come under pressure from very low interest rates, while highlighting pockets of stress on its books through personal loans in Western Sydney and Melbourne.
That being said, Mr Comyn said the bank would continue to grow, highlighting its benefit to retirees.
“In a low rate environment, [CBA] will continue to maintain a disciplined approach that delivers balanced outcomes for all our stakeholders, including over 6 million savings customers, 1.6 million home loan customers and 800,00 retail shareholders, including many retirees who rely on our dividends,” Mr Comyn concluded.
nestegg has previously reported ANZ, Westpac and NAB’s financial reports.
At the time of writing, the bank’s share price increased by nearly 1 per cent following the announcement.
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