Australia’s biggest bank posts record results

commonwealth-business-people re-el magazine

13 August 2015

Tags:business, business news  financial news, business finance, small business websites

The Commonwealth Bank of Australia has posted a record full year net profit of A$9.1bn (£4.2bn, $6.6bn).

That’s a 5% rise compared with the A$8.7bn reported in the previous year.

Shares in the country’s biggest bank went into a trading halt as it announced a A$5bn capital-raising in order to meet stricter regulatory requirements.

The money raised comes in the wake of similar moves by many of the country’s other big lenders.

The banks have been raising cash in response to demands from the Australian Prudential Regulation Authority that they bolster their books to be better protected against future financial crises.

“Maintaining a flexible and strong balance sheet, including a strong capital position, continues to be a strategic focus for the group,” chief executive Ian Narev said in astatement.

Earlier in August, ANZ bank raised A$3bn while Westpac raised A$1.25bn. In May, the National Australia Bank raised A$5.5bn.

Market analyst Michael McCarthy, of CMC, told the BBC that while the overall profit figures were solid, there were still concerns about a slowing growth trend and that need for additional capital.

“The big question for the bank and for shareholders generally is – where will the growth come from in the future?” he said.

CBA’s results were in line with previous estimates, and the bank said it it had a “positive view” of the country’s economy.

“The Australian economy has some good foundations,” Mr Narev added, pointing out that the central bank’s decision to cut interest rates to a record low of 2% was stimulating housebuilding in the country.

However, Mr Narev cautioned about risks in the short-term from global economic volatility.

Tags:business, business news  financial news, business finance, small business websites





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