CBA profits drop but number of bad debts starts to fall
COMMONWEALTH Bank of Australia, the country’s third-largest lender, saw full-year pre-tax profit fall nine per cent to A$5.8bn (£2.9bn) yesterday, compared to A$6.4bn in 2008.
However second half profit at the bank registered an 18 per cent improvement, rising to A$3.2bn from $2.7bn in the first half of its fiscal year, which ended on 30 June.
The bank was helped by lower than expected bad debt charges in the second half, with impairments falling to A$1.33bn compared to A$1.6bn in the first six months.
But full year impairment hit A$2.9bn compared to A$930m in 2008 and chief financial officer David Craig refused to rule out bad debts rising again, saying that it was “too early to declare victory on that”.
Chief executive Ralph Norris said: “The group is emerging from the global financial crisis in a very strong position.”
Australian banks have emerged relatively unscathed from the financial crisis and the country has maintained positive GDP growth figures while European countries and the US have floundered.
But a slowdown in growth, coupled with rising unemployment, has led to increasing bad debts among the country’s lenders.
The bank also confirmed that it was cutting its full-year dividend by 14 per cent and declared a final dividend of A$1.15 per share.
Its results were helped by the acquisition of Australian lender BankWest, which it bought from Lloyds earlier this year.