Profits rise to $5.4 billion
Commonwealth Bank profits rose to $5.4 billion in the first half as the banking giant expanded its large portfolio of home loans and deposits while also benefiting from lower bad debt.
On Wednesday CBA said cash net profit rose 5 per cent in the December half compared to the same half a year earlier; This result was supported by the bank retaining market share in mortgage lending and expansion in deposit and business banking.
After the Federal Reserve raised interest rates for the first time in more than two years last week, CEO Matt Comyn said the banking giant thought there would be “upward pressure” on interest rates due to high inflation in the economy.
“Economic growth strengthened throughout the half-year due to increases in consumer demand and increased investment in artificial intelligence and energy infrastructure. Supply-side constraints mean the economy is struggling to meet this increased demand,” Comyn said.
“As a result, inflation is expected to remain above the Central Bank’s target range for a while, increasing the upward pressure on interest rates.”
Comyn said CBA customers had until recently supported low rates and a strong labor market, with the bank reporting lower costs for bad loans and a decline in mortgage arrears.
CBA said it would increase its interim dividend by 4 percent to $2.35. Analysts were expecting first-half profits of about $5.2 billion and dividends of $2.31 for CBA.
More to come.
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Clancy Yeates is deputy business editor. He covered banking and financial services and was previously a national business correspondent in the Canberra bureau.Connect with: X or email.
