The Commonwealth Bank will pay an unchanged interim dividend of $2 a share after reporting a small improvement in net earnings for the half year to the end of December.
The country’s biggest bank said in a statement to the ASX this morning before trading that its cash net profit ‘from continuing operations” rose 1.7% to $4.676 billion in the half, while statutory after-tax net profit including discontinued operations was $4.6 billion.
Operating income of $12.408 billion was down 1.9%, with “volume growth offset by lower net interest margin, lower markets and fee income, and the impact of weather events.”
CBA said its net interest margin dipped to a still sold 2.10%, 6 basis points lower than the first half of 2017-18, because of “higher funding costs and home loan switching and competition.”
Operating expenses of $5,289 million were down 3.1%, with “elevated risk, compliance and remediation costs offset by prior period one-offs.”
The CBA said its loan impairment expense of $577 million, equivalent to 15 basis points of average gross loans and acceptances annualised, down from 16 basis points in the first half of 2017-18.
Return on equity (cash) of 13.8%, down 40 basis points while the bank’s cost to income ratio fell 60 points to 42.6%.
In a statement with the results, CEO Matt Comyn was confident about the outlook saying the economy remains strong, exports to Asia are doing well, “wage growth edging higher” and “near full employment.” he added that the housing market was in “transition”.
