Major bank posts record profit growth, largely thanks to home loans

by AB14 Feb 2013

CBA made a record $3.78 billion half-year profit for the year ended December 31 and says the economic outlook is improving.

Australia’s biggest lender says cash earnings increased by 6%, while shares jumped $1.85 (2.7%), to a new record high of $67.37, taking the bank's market capitalisation to $108 billion.

CBA's retail banking arm, which writes one out of every four home loans nation-wide, posted a 13% rise in income, contributing $1.5 billion to the final result.

However, the lender says its funding costs are still under pressure, signalling a hesitation regarding any potential cash rate cuts being passed on in full to borrowers.

Chief executive, Ian Narev, says that although credit growth remained sluggish across much of the economy during the six months leading up to December, the global economy had benefited from a period of stability, which had lifted the economic outlook.

‘‘In each of the major areas of concern – European Union stability, US recovery and China’s on-going growth – developments have been positive overall. As a result, we have experienced a period of relative stability, which has had a positive impact on global equity and debt markets.”

Narev warns, however, that US recovery remains fragile and that there’s still no lasting resolution to the Eurozone’s sovereign debt crisis.

‘‘But if the current stability continues, we believe it will translate into a slow but steady rebuilding of consumer and business confidence in Australia.  And that is our base case for the 2013 calendar year.’’





  • by Home loan customer 14/02/2013 7:35:16 AM

    So, a super profits tax, soon?