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CBA provisions drag profit down to $4.74bn

Stuart Condie  |  07 Feb 2018Text size  Decrease  Increase  |  
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SYDNEY - [AAP] Commonwealth Bank's (ASX: CBA) half-year profit has fallen 1.9 per cent to $4.735 billion after Australia's largest bank set aside cash for potential penalties in its Federal Court tussle with AUSTRAC.

CBA, reporting its final set of results under chief executive Ian Narev, has made a $375 million provision for penalties that could result from AUSTRAC's allegations of money-laundering and terrorism-funding law breaches.

Underlying cash profit, pro forma, for the six months to December 31 excluding the provision rose 5.8 per cent to $5.11 billion--narrowly missing analyst expectations--and the bank lifted its interim dividend 1 cent to $2.00.

"We have focused a great deal of effort on fixing our mistakes, and becoming a better bank," Mr Narev said in a statement.

"We recognise, and regret, that these costs arise from our failure to meet some standards that we should have."

Statutory profit was flat at $4.906 billion while cash profit, including the life insurance business that CBA has agreed to sell to AIA for $3.8 billion, dropped 0.7 per cent to $4.871 billion.

Net interest margin rose 0.06 percentage points over the half year to 2.16 per cent, helped by mortgage repricing to help sway borrowers away from interest-only loans.

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Owner-occupier lending grew 7.5 per cent in the 12 months to December 31, while investor lending inched up just 0.5 per cent in the same period as APRA limits on riskier loans continued to take effect.

CBA'S H1 PROFIT DROPS

* Cash profit down 1.9pc to $4.735bn

* Net profit flat at $4.906bn

* Total operating income up 2.3pc to $13.122bn

* Interim dividend up 1 cent to $2.00, fully franked

 

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© 2021 Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.

This service is published for general information purposes only without assuming a duty of care. AAP is not in the business of providing financial product advice (whether personal or general advice), and gives no warranty, guarantee or other representation about the accuracy of the information or images contained in this service. AAP is not liable for errors, omissions in, delays or interruptions to or cessation of the services through negligence or otherwise. The globe symbol and "AAP" are registered trademarks.

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