CommInsure struggles amid solid result for CBA
The Commonwealth Bank has reported a 5 per cent increase in net profit after tax for the six months ending 31 December 2010 to $3,052 million, but the banking group’s analysis suggests its insurance division, CommInsure, struggled through the period.
While the bank reported that its wealth management division had achieved a 12 per cent increase in underlying profit after tax to $329 million, an analyst briefing revealed CommInsure recorded only a 1 per cent increase in underlying profit and a 23 per cent decline in cash net profit after tax.
This compared with the solid performances of Colonial First State and Colonial First State Global Asset Management, which were up 31 per cent and 13 per cent respectively.
CommInsure struggled despite an 11 per cent increase in life in-force premiums and an 8 per cent increase in general insurance in-force premiums.
Discussing the wealth management division result, the Commonwealth Bank announcement said that it had been underpinned by solid growth in the funds management business while the insurance business had delivered robust margins.
It said funds under administration as at 31 December were $191 billion, up 3 per cent, and driven by solid investment returns.
Commenting on the banking group’s performance, chief executive Ralph Norris (pictured) described it as a solid result in what had been a challenging six months.
Looking over the horizon, he said while the Australian economy continued to perform well and other advanced economies were showing signs of improvement, the domestic banking industry still faced headwinds.
Norris said underlying credit growth remained subdued with both consumer and corporate confidence fragile.
AUTHOR
Mike Taylor
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