CBA posts record profit as borrowers feel the pinch
The strong results mean the bank is well placed to manage economic headwinds, CEO Matt Comyn said
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The Commonwealth Bank has credited its continued focus on supporting customers and investing communities for its record $10.2 billion profit.
Releasing the full financial year 2023 results this morning, the six percent increase in cash net profit after tax comes in the midst of rising inflation, higher interest rates and a cost of living crisis.
The CBA said in a statement that it had funded $149 billion of new lending as Australia’s largest home lender, helping 150,000 Australians to buy a home. It also noted that CBA has provided Australian businesses with $35 billion of new lending, with one in four small and medium size businesses now CBA customers.
It’s good news for shareholders, with return on equity up 14 percent resulting in a dividend per share of $4.50.
Acknowledging that some borrowers were facing financial challenges following a 4 percent interest rate rise in just over a year and increasing cost of living pressures, Commonwealth Bank CEO Matt Comyn said the results demonstrated a resilient banking system and provided stability for the wider Australian economy.
“It has been an increasingly challenging period for our customers, dealing with rising cost of living pressures,” said Mr Comyn. “Our balance sheet resilience allows us to support our customers and deliver sustainable returns for shareholders.”
He said the CBA would continue to monitor the impact of a slowing economy and reduced discretionary spend, particularly on small business.
“The Australian economy has been resilient with the tailwinds of a recovery in population growth, relatively high commodity prices and low unemployment,” Mr Comyn said. “However, there are signs of downside risks building as rising interest rates have a lagged impact on mortgage customers and other cost of living pressure become a financial strain for more Australians.
“The Australian banking system remains strong and has navigated rapidly changing and uncertain global financial conditions through sound liquidity risk management and strong capital regulation.”
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
Employment grew for the 16th consecutive month as companies expanded.
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According to a recent PMI report, Qatar experienced its fastest non-energy sector growth in almost two years in June, driven by surges in both existing and new business activities.
The Purchasing Managers’ Index (PMI) headline figure for Qatar reached 55.9 in June, up from 53.6 in May, with anything above 50.0 indicating growth in business activity. Employment also grew for the 16th month in a row, and the country’s 12-month outlook remained robust.
The inflationary pressures were muted, with input prices rising only slightly since May, while prices charged for goods and services fell, according to the Qatar Financial Centre (QFC) report.
This headline figure marked the strongest improvement in business conditions in the non-energy private sector since July 2022 and was above the long-term trend.
The report noted that new incoming work expanded at the fastest rate in 13 months, with significant growth in manufacturing and construction and sharp growth in other sectors. Despite the rising demand for goods and services, companies managed to further reduce the volume of outstanding work in June.
Companies attributed positive forecasts to new branch openings, acquiring new customers, and marketing campaigns. Prices for goods and services fell for the sixth time in the past eight months as firms offered discounts to boost competitiveness and attract new customers.
Qatari financial services companies also recorded further strengthening in growth, with the Financial Services Business Activity and New Business Indexes reaching 13- and nine-month highs of 61.1 and 59.2, respectively. These levels were above the long-term trend since 2017.
Yousuf Mohamed Al-Jaida, QFC CEO, said the June PMI index was higher than in all pre-pandemic months except for October 2017, which was 56.3. “Growth has now accelerated five times in the first half of 2024 as the non-energy economy has rebounded from a moderation in the second half of 2023,” he said.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
