Commbank profit defies recent dramas
The Commonwealth Bank has reported a 14 per cent increase in net profit after tax to $8,631 million in its full-year results announced on the Australian Securities Exchange today.
Commonwealth chief executive, Ian Narev described the result as benefiting a wide range of stakeholders and emphasised the banking group's social credentials, but steered well clear of discussing the recent controversy surrounding its financial planning operations.
However a drill-down on the company's full results announcement revealed that its Wealth Management division revealed that cash net profit after tax increased by 17 per cent and that it was not expecting to be unduly hampered by the costs flowing from the compensation and other remediation arrangements entered into with the Australian Securities and Investments Commission (ASIC).
The ASX announcement stated: "The Group has provided for the licensee conditions in Commonwealth Financial Planning and Financial Wisdom Limited and has separately announced an Open Advice Review program for customers of CFP and FWL who received financial advice between 1 September 2003 and 1 July 2012."
"As this program has only recently commenced and the outcomes are therefore uncertain, the Group considers that provisions held are adequate and that the overall costs of the program will not be material to the Group results".
Elsewhere in its ASX announcement, the bank noted that its insurance division Comminsure had improved its position with insurance income up 6 per cent to $575 million and with wholesale life insurance benefiting from repricing.
The CBA board declared a final dividend of $2.18 per share, an increase of nine per cent, delivering a total dividend for the year of $4.01.
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