The Commonwealth Bank has reported an unaudited net profit of or $2.8 billion for the first quarter of 2017-18, with cash earnings up 6 per cent.
Expenses were up 4 per cent as the bank looks to provision for large fines (or a significant settlement) relating to court action instigated by AUSTRAC on 2 August 2017.
The AUSTRAC civil case, which relates to the bank’s failure to properly monitor millions of dollars in cash deposited via its so-called ‘intelligent deposit machines’, was quickly followed on 7 September by the announcement of an APRA inquiry into CBA’s governance and culture.
CBA had previously announced that none of its executive team would be receiving a bonus for 2016-17, and that chief executive Ian Narev would be leaving the bank by July 2018.
In its trading update this week, the bank said its expenses had increased by 4 per cent to help provision for any fine or settlement arising from the AUSTRAC civil case.
CBA’s core equity tier one ratio has increased by 55 basis points to 10.1 per cent, and is likely to increase further following the announcement of the sale of its life insurance businesses to Hong Kong-based AIA Group.
