CBA posts another record $8.68b profit
Shares in Commonwealth Bank have fallen more than three quarters of a per cent, despite the lender unveiling a record $8.68 billion profit.
Australiaâs largest bank lifted its cash profit 12 per cent for the year to June 30, 2014, from $7.82 billion in 2013.
It also lifted its fully-franked final dividend 18 cents to $2.18, taking its full year dividend payout to $4.01.
But Commonwealth shares were down 66 cents to $81.01 as of 1100 AEST.
OptionsXpress market analyst Ben Le Brun said the result met market expectations but wasnât enough to push the bankâs shares higher, given it is already valued at around 15 times its forward earnings.
âThe market got what it was expecting ⌠but that 15 times forward earnings is probably a reason to sell off a tiny bit in this session,â he said.
But, he said, the result was a good one and the bankâs shares were unlikely to weaken substantially.
âIt is a very impressive result and it probably goes some way to show why it is probably the highest rated bank in the world at the moment,â he said.
âI think, if it does fall out of favour with the market over the next few days, it will be a very short-lived story.â
The bankâs revenue fell one per cent to $44.31 billion.
CBA chief executive officer Ian Narev said the bank was âcautiously positiveâ about the outlook for the 2015 financial year.
âWhilst business and consumer confidence levels have remained fragile, the levels of underlying activity confirm the strong foundations of the Australian economy.â
Mr Narev said the 102-year-old company had kept a balance between its short term and long term priorities.
âAt the same time as delivering a 12 per cent increase in cash earnings, and a strong return on equity, we reinvested $1.2 billion into the business, most of which was targeted at out long term strategic priorities â people, technology, strength and productivity.â
Despite strong competition between banks, the net interest margin, which is the difference profit made on loans, improved one basis point to 2.14 year on year, with the positive impact of a change in portfolio mix offset by âincreased pressure on lending and deposit pricingâ.
Bad debt also improved, with the the ratio of impaired assets improving four basis points to 16Â basis points.
Customer deposits were up $34 billion to $439 billion and now represent 64 per cent of the groupâs total funding.
Earnings from its retail banking division were up 12 per cent to $3.47 billion, and up four per cent from its business and private banking business to $1.53 billion.
Meanwhile, the bankâs wealth management division lifted earnings 17 per cent to $793 million and its institutional banking and markets division recorded a five per cent increase to $1.26 billion.
â with AAP








