CBA boss says ‘short, sharp contraction’ will avoid more RBA pain

James Eyers and Ayesha de Kretser

Aug 10, 2022 – 5.20pm

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Commonwealth Bank CEO Matt Comyn is hoping for a “short, sharp contraction” in the economy and says consumer spending must fall to prevent the Reserve Bank increasing the official cash rate beyond 3 per cent and triggering a recession.

Announcing a bumper full-year profit of $9.6 billion, up 11 per cent as it unwound pandemic-related buffers, Mr Comyn said the record low level of bad debts was a lagging indicator. He predicted things will get worse if consumers don’t pull in their horns and the RBA is forced to crack the whip harder to stymie inflation.

James Eyers writes on banking, payments and fintech. He is a former legal and investment banking editor at the AFR, has degrees in commerce and law from UNSW, and is co-author of Buy now, pay later: The extraordinary story of Afterpay

Ayesha de Kretser is a senior reporter with The Australian Financial Review covering the aviation and tourism sectors. She has previously reported on banking, mining and commodity markets.