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CBA beats expectations with $9.9bn profit

Stuart Condie  |  09 Aug 2017Text size  Decrease  Increase  |  

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SYDNEY - [AAP] Commonwealth Bank (ASX: CBA) has beaten analyst expectations with a full-year cash profit of $9.88 billion.

The result was a 4.6 per cent improvement on 2016 and, as expected, represented an eighth straight record for Australia's largest bank.

"Commonwealth Bank's performance this year has again contributed to the financial wellbeing of our customers, shareholders, our people and the Australian economy," chief executive Ian Narev said.

"This is the result of our consistent focus on customer satisfaction, innovation and financial strength."

Mortgage repricing in response to regulatory intervention in the home loan market contributed to a second-half cash profit of $4.97 billion.

But higher funding costs and competition for mortgage customers more than offset those gains, pushing net interest margin down 0.03 percentage points to 2.11 per cent.

Analysts had expected a 12-month cash profit of about $9.8 billion.

Statutory net profit for the 12 months to June 30 rose 7.6 per cent to $9.93 billion.

CBA declared a fully franked final dividend of $2.30 per share, up 9 cents on last year, taking its 12-month payout to $4.29.

The bank has introduced a discounted dividend reinvestment program, which should help it build capital reserves to meet the Australian Prudential Regulatory Authority's recently defined "unquestionably strong" standards.

It also confirmed it is in talks with potential buyers of its Australia and New Zealand life insurance businesses, although it said it may still end up retaining them.

CBA'S RECORD RUN

* Cash profit up 5pct to $9.881bn

* Net profit up 8pct to $9.928bn

* Total revenue up 5pct to $26.005bn

* Final dividend up 8.0 cents to $2.30 per share, fully franked

 

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