CBA mortgage income up 49%, profits leap 36%
By
Larry Schlesinger
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10/02/2010 10:39:00 AM
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17
comments
The Commonwealth Bank's stranglehold on the mortgage market appears to have tightened further after it reported interim group home loan income up a staggering 49% and profits up 36%.
The jump in home loan income was attributed to the bank increasing its market share and "significant growth in outstanding home loan balances".
Brokers received a mention with the bank saying balance growth was "supported by competitive standard variable home loan rates...and a strong branch and broker presence, with both channels continuing to outperform market growth".
As a stand alone business, the Commonwealth Bank reported a staggering 54% jump in interim profit, recording cash NPAT of $2.94bn for the six months ending 31 December 2009.
On a group basis (including Bankwest, ASB Bank etc), NPAT was $2.91bn, a 36% increase on the corresponding period last year.
The CBA group grew lending balances by $51bn to $547bn, while retail and business interest bearing deposits were up $21bn to $362bn.
CEO Ralph Norris called it a "very good result" and said it demonstrated the resilience of the bank's business model and the underlying strength of each of its businesses.
Related stories:
CBA rates up 37bps - The Commonwealth Bank has taken the middle ground between NAB and Westpac by raising rates by 37bps, 12 points above the RBA cash rate increase
Latest Comments
Total:
17
comment(s)
Broker on
10 Feb 2010 11:45 AM
I don''t care what spin they put on this , it just further demonstrates that all those rate increases over and above the Reserve Bank were all about profit as NOTHING ELSE MATTERS.
There never has been a GFC within CBA , as all their customers are paying through the nose, be it Homeloans, business loans ( try getting one these days!) credit cards etc, all have much fatter margins than ever before, and all the majors are in on the game.
Nice to see the Broker commission cuts didn''t eat into those obscene levels of profit....Best they all take the day off, and get on the Moet!!
SunnyCoastBroker on
10 Feb 2010 12:22 PM
It''s bordering on obscene that a Bank can record this level of profit and book balance increase, and then still have the gall to charge brokers $500 to become re-accredited if they don''t meet volume requirements! And this at a time when they have tightened credit to the point where it''s much more difficult to get them to approve a deal anyway!
David on
10 Feb 2010 12:49 PM
Thanks for sharing the pain with us CBA.
Melb Broker on
10 Feb 2010 12:53 PM
And our idiot Govt thinks there is nothing wrong with this picture? These levels of an increased stranglehold on the market and dangerous. Wake up Canberra and stop being controlled by the banks.
Elle on
10 Feb 2010 12:56 PM
It''s funny.... I haven''t received the memo about broker commissions returning to a sustainable level?? Has anyone else got theirs??
BBB on
10 Feb 2010 01:15 PM
If The Federal Goverment cannot see that the CBA has used the Goverment guarantee to its own benefit with a profit like this after the GFC , then Wayne Swann is simply not with it.
What we will need to look for is bonuses and large pay increases .
Every one has the right to make a profit and a good one but when the CBA says to me as a broker , we Must cut your commissions and not pay ypui a trail in year 1 due to cost increases and then this happens it was a TOTAL LIE!!!!
I will not be considering reapplying for accredation any time soon , only some one who is out of touch with reality would make the CBA their first choice , even if they have a HOLISTIC approach ( that is another expression for give us control of your client!!)
WBC on
10 Feb 2010 01:54 PM
On a positive at least they will have some money to lend.
Broker on
10 Feb 2010 01:59 PM
No doubt Westpac will report similar growth in due course; surprise, surprise the cat is well and truly out of the bag now CBA & at Westpac soon I suspect. What other blatant LIES will you come up with to ensure that you continue to rip off your customers and us brokers alike?
If the so called cost of funds is SO BAD….how then are you able to increase your year on year performance in the home loans area by a staggering 49%????? (see above for the obvious answer).I can hear the champagne corks popping in CBA already.
CBA, you should be totally ashamed that you have gouged so many people (under your fake cost of funds slogan) over what has been a very challenging year or two, but shame doesn’t get a guernsey within with the bank executive vocabulary does it?
Our banking system is showing marked similarities of a communist regime, where price fixing is the way to get the “job done”, and third line forcing (how else can minimum volume requirements be described????) is alive and well. Add a bit of collusion if and when required!
Who is at the wheel?....most certainly not this Government, as the banks are effectively running this economy as they are the ones that seem to impact our cash flow , much more so than any Government has!
You have to wonder if this mess will ever be fixed, I won’t be holding my breath.
KeyChange on
10 Feb 2010 02:03 PM
CBA - Determined to be deceitful
Greg6547 on
10 Feb 2010 02:17 PM
There is a lot of anger in todays commentary. The Banks increases appear to more about increased market share than anything else. Stop being so negative guys. The shareholders are very happy with this result - good on them. If the big banks keep the rates high, there are others in the market who are cheaper. Stop bagging the Banks and send your clients to other lenders. Vote with your feet. At the end of each day, you should be looking at the best deal for your client and if that is a Bank so be it, if not, even better. Get on doing what you do and let the Bank make money off those people who allow them to. It''s simple !!!
SteveL on
10 Feb 2010 04:05 PM
Is anyone really surprised? This scam has been going on since banking began in the venecian days (JUST Prior to the first dark age...any coincidence?)
NOW we have Banks getting bailouts, banks ripping off clients AND Brokers at their discretion and our so-called Government obviously in on it! I wonder what type of kickback Swan and his cronies get from the majors, just like Turnbull would have had the ETS got through? but, alas, nothing adverse will come of it for the criminals here (CBA, WBC et al) as they are so far above the law it isn''t funny! Does anyone else seem to think there is a general "cash grab" at the moment? Banks, Utilities, Groceries, just about everything has either gone up in price, or down in quality / size. Or am I just getting old and cynical?
SteveL on
10 Feb 2010 04:14 PM
RE: Greg6547. it isn''t that simple mate. They have a captive market due to policies, market conditions etc and have effectively PREYED on both the brokers and more so the clients. That is what happens in a game of monopoly isn''t it? If it was as simple as placing business elsewhere, I can tell you they would NEVER have reached this level of dominance.....
sniffer on
10 Feb 2010 05:37 PM
oh come on... You are all full of wind and would struggle to meet the intellect of a stoned potato chip.
In other countries banks stopped lending. Simple as that!
There are no deals for brokers when the banks have no money – they also wouldn’t be funding the non-banks if they themselves weren’t profitable.
In Australia the banks want your business - they just want quality brokers. If you adapt to the times and pick your 2 majors, 1 non bank and 1 non-conformer, you will have all basis covered for your clients.
Most brokers don’t even settle $1M per month – how can you expect to have 25 lenders when you don’t have enough volume to even keep 2 happy?
In terms of CBA profits. Well done CBA. Great to see Aussie banks will provide a stable base for a secure mortgage industry in Australia.
Harry on
10 Feb 2010 06:39 PM
sniffer....is that you Ralph?
Tony H on
11 Feb 2010 10:30 AM
What in the world are we paying aggregators for. This is a perfect chance for them to stand up and work for their money to recoup a greater commission for its members. I won''t be holding my breath. Like Banks they appear to be a necessary evil.
Beauchamp on
12 Feb 2010 12:41 PM
Shouldn''t the brokers contributing to this website, complaining about their lot in life, go out and write more business? Commissions in Australia are still quite excessive by international standards and are more likely heading down than up. A half decent broker writing $3m plus per month can make a much better living than someone with their required qualifications would likely earn anywhere else.
Chris on
14 Apr 2010 12:09 AM
And what are the Aggregators doing on the Brokers behalf sweet FA!