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Wholesale funding costs are likely to remain above levels experienced in 2007, the Commonwealth Bank (CBA) said today.
Delivering its results for the first half of the financial year, the bank also conceded that it expects upward pressure on interest rates to continue at least throughout the calendar year.
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While CBA claims to have no direct exposure to the sub-prime crisis, Mr Norris said it has felt the pressure from increases in its wholesale funding costs.
“The last six months has been challenging for global banking… as the sub-prime assets crisis in the United States has unfolded,” chief executive officer Ralph Norris said.
“While we have a highly diversified wholesale funding programme, we are not insulated from these increases, having incurred additional funding costs of $100 million in the first half,” he said.
Despite the rise in funding costs, the bank reported a four per cent rise in net profits of $2,385 million, compared to the same period in 2006.
Mr Norris said he was satisfied with the result considering the difficult environment for the financial services sector.
Published: 13-02-08
