Commonwealth Bank Profits Surge to $10.25b Amid Economic Recovery
Commonwealth Bank of Australia has just delivered a big set of numbers, posting a full-year cash profit of $10.25 billion — that’s a 4 per cent jump from last year. The lift was driven by steady growth in business loans and mortgages, along with fewer bad debts, which always helps the bottom line. Investors were rewarded too, with the second-half dividend lifted to $2.60 per share, taking the total payout for the year to $4.85.
Chief executive Matt Comyn struck an optimistic tone when releasing the results, saying many households have started to see real relief. That’s thanks to a combination of lower interest rates, tax cuts, and easing inflation, all of which have put more disposable income back into people’s pockets. While global conditions remain unpredictable, Comyn pointed out that the Australian economy has stayed resilient — helped by a strong jobs market, steady immigration, and ongoing public investment.
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Even so, sentiment is still a little cautious. The bank is expecting modest economic growth ahead, but the ride could be bumpy if global uncertainties flare up again. Interestingly, the Reserve Bank’s recent run of interest rate cuts has been passed on in full to mortgage customers, which has kept competition in the banking sector intense. Margins — the difference between what the bank earns on loans and what it pays for funding — have held at 2.08 per cent for the year, although they were flat in the most recent half.
On the customer front, the proportion of borrowers behind on their mortgage repayments has stabilised. In fact, 85 per cent are now ahead on their loans, even though the bank still provided 139,000 tailored payment arrangements to help those facing pressure. Impaired loan charges fell 9 per cent to $726 million.
CBA’s share price has had a stellar year, jumping more than 37 per cent, as global investors sought exposure to Australia’s relatively steady economy. The bank also ramped up its tech spending by 14 per cent to nearly $2.3 billion, with a focus on fighting scams, boosting AI capabilities, and improving customer experience. Its new partnership with OpenAI is part of that push, promising more personalised service and better protection from fraud — the bank claims to have stopped $800 million worth of scam payments over the year.
Return on equity slipped slightly to 13.5 per cent, but the strong profit result was broadly in line with market expectations. Looking ahead, analysts think margins could come under pressure as rates fall and competition stays fierce, which may prompt banks to keep a tight grip on costs. For now, though, CBA’s combination of solid lending growth, stable margins, and hefty tech investment has kept it firmly in the spotlight — and investors seem to like what they see.
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