SYDNEY, AAP – Commonwealth Bank of Australia has posted a fall in half-year profit in the wake of the coronavirus pandemic, but the result is still in the multiple billions.
The nation’s biggest lender on Wednesday revealed cash net profit, which excludes volatile items, totalled $3.8 billion for the first six months of 2020/21.
This reflected a fall of 10.8 per cent from the previous corresponding period.
Its statutory bottom-line result was $4.9 billion, down 20.8 per cent.
CBA chief Matt Comyn was upbeat about the bank’s prospect in the second half of the financial year, citing a boost to the economy from federal government stimulus measures.
“Although the outlook is positive, there are a number of health and economic risks that could dampen the pace of recovery,” he added, alluding to possible hiccups in the rollout of coronavirus vaccines.
“We are prepared for a range of scenarios and have taken a careful approach to provisioning.”
CBA’s net interest margin – the profit it makes on loans – contracted by 10 basis points to around two per cent in the first half, reflecting the impact of historically low lending rates.
At the same time, the funds it had to put aside to cover bad loans increased by $233 million to $882 million, although this was a big improvement on the $1.9 billion booked in the second half of fiscal 2020.
“Arrears on home loans and consumer finance remain low, and are being temporarily insulated by COVID-19 support measures,” CBA’s earnings report said.
But the bank noted it was still seeing corporate loan vulnerability in the aviation, entertainment and leisure and tourism sectors – which were all hit hard by the pandemic.
CBA will pay its investors an interim dividend of $1.50 per share.