CBA has set aside $375 million to provision for potential fines arising from AUSTRAC’s civil proceedings, dragging down the bank’s half-year cash profit to $4.73 billion.
The Commonwealth Bank has missed analyst expectations in its annual result for the half-year to 31 December 2017, posting a cash net profit after tax of $4.73 million (down by 1.9 per cent on the prior corresponding period).
The result is a “miss” compared to expectations from analysts like UBS’ Jonathan Mott, who predicted a cash net profit of $5.2 billion.
CBA has made a provision of $375 million for potential AUSTRAC fines, as well as an expense provision of $200 million for the expected costs associated with the banking royal commission.
Outgoing CBA chief executive Ian Narev acknowledged that the bank’s performance has been “significantly overshadowed by a number of regulatory and reputational issues”.
“In accordance with accounting standards, we have taken appropriate provisions. We take these matters extremely seriously, and acknowledge that we have let down stakeholders in some very important areas,” Mr Narev said.
“We should have done better, and are committed to doing so. Major improvements have been made, including work that has been underway since 2015 to strengthen and improve our financial crimes compliance.”
CBA also reported a net interest margin of 2.16 per cent (up by 6 basis points on the prior corresponding period), a cost-to-income ratio of 43.9 per cent (up by 120 basis points), earnings per share of $2.72 (down by 3.2 per cent) and a dividend of $2 (up by 1 cent).
Stimulate new ideas. Stimulate new thinking. Top up your CPD and hear from industry experts with InvestorDaily’s Knowledge Centre. Keep up to date with the latest trends and reforms, all while adding to your CPD. Explore the knowledge centre Knowledge Centre now.
Despite unemployment falling to pre-pandemic levels, the central bank still thinks it’s too early to count its chickens on the success of ...