CBA warns of loan losses
The Commonwealth Bank warned investors at its annual general meeting yesterday that the bank’s loan losses will increase over the next eight months. The Commonwealth Bank’s chief executive, Ralph Norris, told the meeting that the failures of investment bank Lehman Brothers, Allco Finance Group and ABC Learning Centres will result in “significantly higher first half provisions” for the bank.
Results for the group’s wealth management business had shown it too was not immune from the deterioration of global investment markets, with funds under management for the September quarter at $178 billion, down 3.8 per cent. Retail net flows were also down $266 million.
The situation for the group’s wealth management business didn’t improve in October, with funds under advice (FUA) falling a further 7.7 per cent to $164 billion.
For the four months to October 31, the group’s average FUA declined 8 per cent compared to the previous half, resulting in lower fee revenue and first-half profits for Colonial First State and Colonial First State Global Asset Management.
However, the risk side of the group’s business performed better, with new retail and wholesale business accounting for a 5.2 per cent growth in in-force premiums for the September quarter.
Commonwealth Bank chairman John Schubert said the bank remained “cautious” about the general outlook for the economy for at least the next 18 months.
Recommended for you
In this episode, hosts Maja Garaca Djurdjevic and Keith Ford take a look at what’s making news in the investment world, from President-elect Donald Trump’s cabinet nominations to Cbus fronting up to a Senate inquiry.
In this new episode of The Manager Mix, host Laura Dew speaks with Claire Smith, head of private assets sales at Schroders, to discuss semi-liquid global private equity.
In this episode of Relative Return, host Laura Dew speaks with Eric Braz, MFS portfolio manager on the global small and mid-cap fund, the MFS Global New Discovery Strategy, to discuss the power of small and mid-cap investing in today’s global markets.
In this episode, hosts Maja Garaca Djurdjevic and Keith Ford are joined by special guest Steve Kuper to dive deep into the recent US election results and what they mean for the world.
