The Commonwealth Bank (CBA) has posted a full-year cash net profit after tax of $9.595 billion, 11 per cent higher than in the previous financial year.
In its results released on Wednesday, CBA said the profit increase was supported by operational performance and volume growth in its core businesses along with sound portfolio credit quality and the reduction of provisions related to pandemic uncertainties.
“Our operating context has changed significantly this year,” said CBA CEO Matt Comyn.
“We have focused on strengthening our customer engagements and relationships, and this has resulted in further growth in our core deposit and lending volumes to retail, business and institutional customers.”
Business deposits were up by 15.1 per cent or $23.9 billion and household deposits climbed 13.2 per cent or $40.9 billion, while business lending lifted 13.6 per cent or $15.4 billion and home lending moved up 7.4 per cent or $36.4 billion.
CBA’s operating income rose 0.9 per cent to $24.38 billion, which it said was driven by volume-related growth in its core products but partly offset by an 18-basis point decrease in its net interest margin to 1.90 per cent.
Operating expenses were down by 1.5 per cent to $11.19 billion, reflecting lower remediation costs and productivity benefits while being partly offset by higher staff costs.
“A highlight of the result is our continued balance sheet strength and capital position that has allowed us to support our customers while delivering consistent and sustainable returns to shareholders,” said Mr Comyn.
The bank said it had a strong capital position with a common equity tier 1 capital ratio of 11.5 per cent, supported by profit generation from its core banking business and the benefits of proceeds received from the sale of Colonial First State and Bank of Hangzhou.
It declared a fully franked final dividend of $2.10 per share, which takes the total dividend for the financial year to $3.85, 10 per cent higher than a year earlier.
“Against many measures, Australian households and businesses are in a strong position given low unemployment, low underemployment, and strong non-mining investment. However, inflation is high, and we have seen a rapid increase in the cash rate which is negatively impacting consumer confidence,” noted Mr Comyn.
“We expect consumer demand to moderate as cost-of-living pressures increase. It is a challenging time, but we remain optimistic that a path can be found to navigate through these economic conditions. We remain of the view that the medium-term outlook for Australia is a positive one.”
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.