Commonwealth Bank of Australia (CBA) has just released its March quarter results.
The bank’s headline profit was significantly impacted by the additional $714m in pre-tax customer remediation provisions distributed in the period ($500m post tax).
“We are committed to improving outcomes for our customers, addressing past failings and compensating customers quickly,” said CEO Matt Comyn.
“The additional $714m in pre-tax customer remediation provisions taken in the quarter demonstrates this commitment, and builds on a range of other initiatives to achieve better customer outcomes, including removing and reducing fees for our customers,” he added.
The bank reported “sustained volume growth” in its core franchise, with home loan growth in line with system and continued growth in household deposits and business lending.
However, 90-day arrears for home loans are currently at the highest level evidenced in years at 0.71%, the steady upward trend continuing from the 0.53% reported in December 2016.
CBA has attributed this to “seasonal factors in the quarter,” as well as “continued subdued levels of income growth and cost of living challenges.”
Operating income was reported as 4% lower, reflecting seasonal impacts, temporary headwinds, and rebased fee income driven by the bank’s Better Customer Outcomes program.
“While headline profitability was impacted by higher remediation provisions, our sound business fundamentals ensure we remain well-placed in a challenging environment, highlighted in this quarter by volume growth in our core businesses, a strong capital position and continued balance sheet strength,” conlcuded Comyn.
There will be more on this story tomorrow