CBA profit slides 8pc to $8.6b as sales fall and costs rise; bank to exit coal

Analysts described CBA’s full-year profit as a "slightly disappointing result". The Commonwealth Bank has reported an 8 per cent fall in it full year profit as the impact of a slowing economy, falling interest rates and remediation of misconduct took their toll. Customer remediation costs increasing by $1b helped drag down CBA’s profit and keep a lid on dividends

The bank says it will exit thermal coal and coal-fired power generation investments by 2030 as it aims to be a zero emissions business

Bad debts rose by more than $1b on growing problems in retail, farming and construction sectors

Net profit came in at $8.6 billion compared to $9.4 billion last year.

Underlying cash profit — the bank’s preferred measure, which strips out one off gains and losses — was $8.5 billion, slightly below market expectations.

The full year dividend was flat at $4.31 a share.

The lack of a special dividend after the sale of a number of businesses, including the recent $4 billion disposal of Colonial First State Global Asset Management, might also disappoint investors, although the bank chose to bolster its top tier capital buffer with the proceeds.

Chief executive Matt Comyn said CBA had made progress on becoming simpler and better, and still had work to do with its planned exit from aligned financial advice.

"We have removed a number of fees and have taken action on remediation," he said "The work is underway to implement the recommendations from the royal commission and APRA prudential inquiry will also deliver better customer, risk and business outcomes. "While this year’s results were impacted by customer remediation costs, revenue forgone for the benefit of customers and elevated risk and compliance expenses, our core business continued to do well — underpinned by growth in home lending, business lending and deposits." CBA CEO Matt Comyn will be interviewed by Elysse Morgan on The Business tonight at 9:45pm on ABC News Channel. Remediation costs increased by $1 billion to $2.2 billion over the year. Economy slowing

Impacts of a slowing economy showed up in a $1.1 billion jump in troublesome and impaired assets.

Loan impairment expenses rose 11 per cent to $1.2 billion.The bank said this reflected exposures and emerging signs of weakness in sectors impacted by retailing, agriculture and construction.Total troubled and impaired exposures now stood at $7.8 billion, or around 0.72 per cent of total exposures. "Collective provisions increased by $90 million during the […]

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