CBA posts record $4.8 billion profit

Sally Tindall, money editor with RateCity, said the news would be welcome relief for shareholders but “less so for any customers struggling to pay the bills each month”.

“CBA’s decision in October to lift mortgage rates for its home loan customers has seen hundreds of thousands of Australians shell out extra cash to help bolster the bank’s record-breaking profit margin,” she said.

Cash profit for the six months to December 31, the bank’s perforated measure of profitability, was up from $4.62 billion for the prior corresponding period and was slightly higher than the analyst consensus of $4.77 billion.

Net profit rose two per cent to $4.618 billion. Interim dividend was flat at $1.98, fully franked.

Commonwealth Bank group chief executive Ian Narev said operating income grew six per cent during the period, with all parts of the business contributing.

“This consistency of income, combined with our focus on long-term productivity, sustains our commitment to keep investing in our customer-focused strategy,” he said.

Mr Narev said the results showed the Australian economy was continuing its “steady transition from a resource-dependent economy to a more diversified one”.

Malcolm Turnbull talks to Commonwealth Bank boss Ian Narev.Source:News Corp Australia

“Sound monetary policy and a lower Australian dollar are stimulating construction and starting to benefit export-sensitive industries such as tourism, education and agriculture,” he said.

“As a result, the economy overall is starting to generate a broader base.”

But he warned global volatility was still a concern for customers and presents challenges in Australia. “We must be cautious, but also remain focused on the long-term to ensure that Australia remains a great place to live and to invest,” he said.

“Continued progress on key policy foundations such as tax and infrastructure will be critical to support business innovation and job creation. We also have one of the strongest financial systems in the world, to underpin economic growth.”

LOCAL STOCKS SMASHED

The Australian share market recorded its worst day in more than four months on Tuesday as renewed concerns about global economic growth spooked investors, driving the benchmark index nearly three per cent lower.

The banking sector, which carries maximum weightage on the ASX, led the losses as shares of Australia’s Big Four banks joined a global sell-off in financial stocks, following sharp overnight falls in shares of European and US banks.

Energy and mining stocks were the other major sectors affected. “There are generally rising concerns about the health of the banking sector globally. That sentiment has rubbed off in our markets too,” CommSec market analyst Steven Daghlian said.

Financial stocks, which comprise nearly half of the main index by weightage, were the worst performers on Tuesday.

The market boards show the volatility at the Australian Securities Exchange.Source:AAP

Commonwealth Bank tumbled $3.51, or 4.6 per cent, to $72.87, while National Australia Bank slid $1.25, or 4.8 per cent, to $24.90. Westpac hit a fresh 52-week low of $28.71 to close $1.56 or 5.1 per cent lower, while ANZ lost 94 cents or 4.0 per cent to $22.79.

Bank of Queensland fared even worse, losing 8.1 per cent, or $1.03, to $11.66 after the lender announced a $15 million review that will spell some job cuts.

Energy shares contributed to the negative sentiment after oil prices resumed their slide overnight.

Origin Energy lost 15 cents, or 3.8 per cent, to $3.82; Santos fell 16 cents, or 5.0 per cent, to $3.06; and Woodside Petroleum dropped 68 cents, or 2.5 per cent, to $26.73.

Among the big miners, BHP Billiton fell nearly two per cent to $16.05, while Rio Tinto slipped 1.2 per cent to $42, giving up some of the gains from the previous session.

Shares in detention centre operator Broadspectrum tumbled nearly 13 per cent to $1.09 after Spanish suitor Ferrovial said it was considering whether to pursue its takeover of the company amid uncertainty about its federal government contract.

The gold miners were the only sector that closed in the green, after gold prices rose to a seven and half month high.

 
[Source:- News.com]