CBA Reports Record Profits

The Commonwealth Bank of Australia has announced that the company has reaped a record $7.09 billion full-year profit. The development is good news, considering the weak business and consumer confidence.

According to CBA, its net profit for the first half of the year increased 11 percent from last year’s $6.39 billion. The bank’s provisions and costs for bad debts also dropped.

The company added that its cash profit reached $7.11 billion, a figure higher by four percent compared to last year’s $6.84 billion. Revenue for the first half of 2012 has also reached $47.2 billion. This is higher by two percent compared to last year’s revenue.

According to CBA chief executive Ian Narev, however, the tough economic times are also making consumers and businesses wary. This has caused some slowdown in revenue growth.

Narev added that the continuing economic challenges may continue to affect business and consumer confidence. He said that because of this, CBA will continue to maintain conservative business expectations.

CBA’s net interest margin, meanwhile, went three basis points down because of the higher costs of customer acquisition. CBA’s chief financial officer David Craig said the banking industry continues to be very, very competitive.

Craig said that customer deposits increased to $379 billion for the first half of 2012. The figure is $30 billion higher compared to last year’s.

The retail and business banking businesses of CBA also posted modest gains. Its wealth management division, however, was greatly affected by weaker equity markets.