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The Commonwealth Bank of Australia (CBA) has reported a 2.3 per cent rise in profit for the six months to June 30, beating market expectations.
Earlier today the bank reported second half year profit of $2.402 billion, up from $2.348 billion a year earlier; it exceeded market forecasts of around $2.289 billion.
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CBA’s recent acquisition of Bankwest, combined with its lower-than-expected bad debt charges has helped the bank drive solid results, however it still refused to call an end to the recent surge in bad debts.
Macquarie Equities’ Lucinda Chan echoed CBA’s caution on bad debts.
“There's probably still a risk of bad debts in Australia from personal debts. Maybe you'll see that ahead," she said.
According to Ms Chan, Australian banks have largely escaped the rout suffered by their global peers, thanks to the Australian government's $52 billion stimulus package and guarantee on wholesale funding.
But rising unemployment and other extenuating factors have caused bad debts to pile up at the lenders.
