Major posts bumper profits, hits back at 'too-big-to-fail'

by 13 Feb 2014
CBA has recorded half-year profits of over $4.27bn, while rebuking claims the bank receives an unfair advantage.

Speaking after the results announcement, CBA chief executive Ian Narev said shareholders of the big four banks receive no net benefit benefit from being one of 'the big four'.

"To the extent that government has had to step in to save an institution, they might have saved depositors, they may have saved some debt holders; equity holders have received nothing from government intervention, even when it happens," Narev told The Australian.

The comments come amid calls for the upcoming Financial Systems Inquiry, which is to be lead by CBA boss David Murray, to address competition in the banking sector.

The bank's profits were up 16% on last year’s results, helped along by an 8% ($28bn) increase in the bank's home loan balances, which includes a 1% increase due to the lower Australian dollar.

Home loan balances for the bank now sit at $387bn. 

The group’s wealth management division also saw significant growth, bringing in $395bn – more than any other arm of the business.

Wealth management earnings as average funds under administration grew by 22%, and 89% of funds performed above benchmark.

The results come despite the bank being involved in two recent class action cases related to Storm Financial and exception fees.

The bank noted in its half-year results class action proceedings related to exception fees were to recommence next month, but said “it is not anticipated to have a material impact on the group”.

Likewise, with judgement from the Storm Financial class action reserved after proceedings concluded in November, the bank stated it believes “appropriate provisions are held to cover any exposures arising from the class action”.