CBA profit: biggest Aussie bank in first earnings slide since GFC

AUSTRALIA’S biggest lender, the Commonwealth Bank, has suffered its first slide in profit since the global financial crisis as a slew of embarrassing scandals takes a heavy toll.

THE Commonwealth Bank has suffered its first slide in profit since the global financial crisis.

The nation’s biggest bank this morning revealed net profit fell 6 per cent to $9.33 billion during the year to June.

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Cash profit — the banking industry’s preferred measurement — also fell, 4.8 per cent to $9.23 billion.

That metric strips out the performance of businesses that have been sold or are in the process of being sold as Australian banks increasingly focus on their core banking operations.

The CBA has unveiled its full-year results — the first under new chief executive Matt Comyn. Picture: James Croucher

The CBA is in the process of selling its Australia and New Zealand life insurance business as well as a range of other assets.

It was the first time cash profit has fallen at the bank since 2009 and came as it was hit with $855 million in fines and costs associated with its breaches of Australia’s anti-money laundering laws, along with the impact of the banking royal commission.

The CBA said cash profit rose 3.7 per cent for the year when those one-off hits were stripped out of the result.

Shares in the CBA rallied after the results were released and were up 2.6 per cent, or $1.87, at $74.76 this afternoon.

Costs association with the CBA’s money laundering scandal have weighed heavily on the bank’s full-year profit.

The results are the first full-year financial numbers handed down by new chief executive Matt Comyn.

“Operating momentum was driven by our core franchise which delivered good volume margin management in home and business lending, ongoing growth in transaction accounts and deposits, and continued uptake of our technology offering,” Mr Comyn said in a statement.

CBA’s net interest margin — broadly its profit on lending — widened by 0.05 percentage points over the year to 2.15 per cent as the bank lifted interest rates on interest only and investor loans.

Despite CBA’s bottom line coming under pressure, the lender lifted its dividend.

It will pay a final dividend of $2.31 a share, taking the full year payout to $4.31 — 2c higher than last year.