Commonwealth Bank of Australia’s (CBA) wealth management unit has reported an 11 per cent decline in cash net profit after tax.
The division, which includes Colonial First State (CFS), Colonial First State Global Asset Management (CFSGAM) and CommInsure, said cash profit slumped to $642 million in the 12 months to June.
Outgoing CBA chief Ralph Norris said the unwinding of mark-to-market losses on the bank’s guaranteed annuities portfolio in prior years was mainly to blame for the decline in the division’s overall earnings.
But CFSGAM stood out by posting a cash profit of $281 million, a 6 per cent increase on the prior year.
“CFSGAM continues to execute strategies to capitalise on global growth opportunities and enhance its domestic business,” he said.
He said about 55 per cent of CFSGAM’s earnings were being generated from offshore and that figure was expected to increase.
CFS’s cash profit declined 1 per cent to $143 million over fiscal 2011.
However, Norris said CFS’s FirstChoice and Customs Solutions platforms performed well in a challenging retail market with positive net flows of $3.4 billion.
“FirstChoice Wholesale Personal Superannuation introduced lowered minimum entry limits, positioning it well for pending Future of Financial Advice reforms,” he said.
CBA’s overall net profit after tax jumped 12 per cent to $6.8 billion for the 12 months ended June. The bank will pay a final dividend of $1.88 per share.
Last month, the bank announced Norris would retire and appointed Ian Narev as chief executive.
Narev has been with CBA since May 2007 and has held the role of group executive for business and private banking since January 2009.
He will take over from Norris on 1 December.
