Commonwealth Bank profits rise to $10.2 billion
Australia’s largest bank saw its profits lift by 5 per cent last financial year alongside a significant uptick in income to $27.2 billion.
Photo supplied: Commonwealth Bank.
Commonwealth Bank CEO Matt Comyn says the results “demonstrate [the bank’s] continued focus on supporting our customers” during a period he admits has been “increasingly challenging” for them.
The company’s net profit after tax in the year ending 30 June was $10.2 billion, up 5 per cent on the previous financial year.
Operating expenses also rose by 5 per cent to $11.6 billion, which were higher due to inflation and an additional technology spend, but were partly offset by productivity initiatives.
The bank was hit with a loan impairment expense that increased by $1.4 billion in the period, which it says reflected ongoing cost of living pressures and rising interest rates.
Comyn said despite a resilient Australian economy there were “downside risks building as rising interest rates have a lagged impact on mortgage customers and other cost of living pressures become a financial strain for more Australians”.
“We are seeing consumer demand moderate and economic growth slow and we are closely monitoring the impact of reduced discretionary spend, particularly on our small and medium sized business customers,” he said.
“The Australian banking system remains strong and has navigated rapidly changing and uncertain global financial conditions through sound liquidity risk management and strong capital regulation.
“We are well provisioned for the changing financial conditions and our strong balance sheet underpins our ability to support our customers and manage headwinds while delivering sustainable returns for shareholders.”
CBA noted that customer arrears had increased in recent months but remain historically low, which it says reflects “low levels of unemployment, and high levels of consumer savings and repayment buffers”.
‘Troublesome and impaired’ assets increased to $7.1 billion from $6.4 billion in FY22, primarily driven by increases in the construction and commercial property sectors.
The bank has increased its impairment provisions from $5.3 billion to nearly $6 billion to buffer its defences, “reflecting the impact from ongoing cost of living pressures and rising interest rates”.
A final dividend of $2.40 per share has been declared, taking the total dividend for the year to $4.50 per share.
