CBA sets record profit

by Julia Corderoy14 Aug 2014
The Commonwealth Bank of Australia has recorded a record cash profit for an Australian bank in the 2013/14 financial year – increasing its net cash profit by 12% to $8.68 billion.

The bank’s lending portfolio – with mortgages making up 54% of its asset class – played a significant role in the bank setting records.

Home loan balances increased $27 billion to $400 billion, reflecting a 7% increase on the prior year. While business and corporate loans increased $12 billion to $184 billion, which also reflects a 7% increase on the prior year. 

Chief executive of CBA, Ian Narev said, “Lower interest rates have been positive for the housing and construction sectors, where increased activity has gone some way to offset the impacts of the anticipated reduction in investment in the resources sector.”

The quality of the bank’s home loans also improved this year, with home loan arrears reducing over the year. The percentage of home loans that are more than 30 days overdue decreased from 1.44% to 1.25%, and those more than 90 days overdue reduced from 0.62% to 0.50%.

Looking to the future, Narev said the bank is “cautiously positive” about the outlook for the coming year.

COMMENTS

  • by Mountains Broker 14/08/2014 10:43:24 AM

    Would it be fair to say that with our banks continuing to record record profits year after year largely on the backs of broker introduced lending that they would now be in a position to return our trail fees to pre-GFC levels? I think 0.25% is not too much to ask.

  • by Coast Broker 15/08/2014 9:30:44 AM

    Agree with Mountains Broker however I think it would take the third party channel using 2nd tier lenders and giving the majors a wide birth for 12 months. Then watch the Majors come chasing for business especially when the CBA say that 38% of their Home Loan business was written by the third party channel. I wonder how much of that 38% was written by Aussie Home Loans know that the CBA own 80% of AHL.

  • by Coast Broker 15/08/2014 9:30:53 AM

    Agree with Mountains Broker however I think it would take the third party channel using 2nd tier lenders and giving the majors a wide birth for 12 months. Then watch the Majors come chasing for business especially when the CBA say that 38% of their Home Loan business was written by the third party channel. I wonder how much of that 38% was written by Aussie Home Loans know that the CBA own 80% of AHL.