CommBank’s $375m headache

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 one 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.

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.


• Cash profit down 1.9pct to $4.735b

• Net profit flat at $4.906b

• Total operating income up 2.3pct to $13.122b

• Interim dividend up one cent to $2.00, fully franked

About author