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CBA enjoys 'strong' profits

by Staff Reporter11 minute read
The Adviser

Staff Reporter

The Commonwealth Bank of Australia’s chief executive Ian Narev has said the bank is “well positioned” for the future – whatever it may bring – thanks to the group’s strong half-yearly results.

Yesterday, the bank revealed it had achieved a statutory net profit after tax for the half year ending 31 December of $3.6 billion – 1 per cent more than at the same time last year.

“This is a strong result, which continues to demonstrate the benefits of the group’s consistent, long-term strategy. We have continued to execute a strategy that is well known to the market: a focus on the customer, disciplined management of volumes and margin, a focus on productivity, and a willingness to invest in long-term growth, particularly through technology,” Mr Narev said.


CBA is one of only a handful of global banks in the ‘AA’ ratings category.

Strong deposit growth during the period saw the bank satisfy a significant proportion of its funding requirements from high quality retail customer deposits. However, competition for deposits remains intense which had a negative impact on margins.

During the period, the group took advantage of improving conditions in wholesale markets, issuing $13 billion of long-term transactions in multiple currencies.

“Since reporting our full-year results in August last year, we have seen some improvements in the global macroeconomic environment. In each of the major areas of concern – European Union stability, US recovery and China’s ongoing growth – developments have been positive overall,” Mr Narev said.

“As a result, we have experienced a period of relative stability, which has had a positive impact on global equity and debt markets.

“Of course, risks remain in the economy, and as a major financial institution we must remain cautious. In particular, there is still no sustainable long-term plan for resolving sovereign indebtedness in Europe, and the US recovery remains fragile. And the long-term effects of the strategies of overseas central banks to restore stability are uncertain. But if the current stability continues, we believe it will translate into a slow but steady rebuilding of consumer and business confidence in Australia.”

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