Major claims tough times on way to $7bn profit

by Adam Smith17 May 2012

A major bank has beaten profit expectations on its way to a $7bn year, but has still claimed challenging conditions.

Commonwealth Bank has released its March quarter update, taking in cash earnings of $1.75bn. The result was ahead of analysts' expectations of $1.7bn.

In spite of the bumper result, the bank pointed to "subdued credit demand and elevated funding costs", saying they had impacted revenue growth. CBA also said higher funding costs had proven a drag on net interest margins.

Commonwealth chief executive Ian Narev said the bank had positioned itself for an "uncertain outlook".

"Consistent with the uncertain outlook that we indicated at the Group's half year results in February, we have retained our conservative business settings, including tight expense control, a conservative funding profile and strong provisioning levels," Narev said.

Related stories:

Major slashes fixed rate pricing to three-year low



  • by JERRY gIBB 17/05/2012 10:26:48 AM

    How sad for an organisation to make such a big profit and still be able to slug the community by not passing on the full rate reductions. Who are the muggs here and what does our Government do to protect the consumer . Nothing!!!!

  • by sidbroker 17/05/2012 10:33:51 AM

    Well said Jerry,and what about ACCC and ASIC arn`t they supposed to lend a hand in underhanded behavior from business or are they only capabale of terrorising small business!!

  • by Country Broker 17/05/2012 10:59:50 AM

    I believe that a bank has the right to make profits that give a satisfactory return on share holders capital that is waht public companies do! In regards to the CBA arguments about why they will not pay trailers in year 1 to brokers on home loans due to cost restraints , those arguments were applicable for a short time during the GFC, and obviously do not apply now!! it is time for all brokers and aggregators to say ENOUGH , we simply do not want to deal with you unless you stop the smoke and mirrors excuses and show us you are committed to the third party chanel by agreeing to pay trailers from day 1 .