CommBank posts $9.2b profit with mixed wealth result
The Commonwealth Bank has confirmed widespread market speculation by posting a record statutory net profit after tax of $9,227 million, up two per cent, for the year ended 30 June, 2016.
The banking group delivered a fully franked final dividend of $2.22 per share, taking the full year dividend to $4.20, flat on the prior year, and representing a cash dividend payout ratio of 76.5 per cent.
But the big banking group's divisional analysis revealed a mixed result for its wealth management businesses where growth in funds management was offset by a problematic outcome in its life insurance business.
The divisional result showed that wealth management recorded a cash net profit after tax for the full year of $617 million, down six per cent on the prior year with the analysis saying that the result had been driven by growth in funds management income and lower operating expenses offset by lower investment experience.
It said insurance income was flat, reflecting strong growth in general insurance offset by a significantly lower life insurance result.
The full-year results analysis also pointed to the fact that the bank's so-called Open Advice Review program had closed for registrations in early July and that over 8,600 completed registration forms had been received.
Commonwealth Bank chief executive, Ian Narev, sought to accentuate the positives from the result claiming the banking group had pursued a simple, consistent strategy for over a decade.
"Continued execution of that strategy, focused on customer satisfaction, innovation and strength, has again driven solid operating performance and balance sheet growth for the Group," he said.
Looking over the horizon, Narev pointed to a number of challenges but also to positives such as continuing demand for Australian resources, a vibrant construction sector in NSW and Victoria, and employment growth in key services sectors.
"However, on-going economic strength will require a lift in the low rates of nominal growth," he said. "Income growth inside and outside Australia remains weak, so people are not feeling better off. When combined with on-going global economic and political uncertainty this makes households and businesses cautious, and hesitant to respond to monetary stimulus."
Recommended for you
Rising bearishness among investors has led to a retreat into defensive assets, according to the latest quarterly manager and intelligence trends report from Bfinance.
Cbus Super, the superannuation fund for blue-collar workers, has announced it paid out almost $300m in insurance claims over the last financial year, a rise of $40m from the year before.
The $700 million not-for-profit fund Lutheran Super has announced it is to merge into Mercer Super, with the transfer set to take place in the fourth quarter this year.
Superannuation assets fell 0.5% in value over the 12 months to the end of June, according to the latest quarterly figures from the Australian Prudential Regulation Authority (APRA).
