Commonwealth Bank of Australia soars to record Q1 profit

[SYDNEY] Australia's biggest company Commonwealth Bank on Wednesday posted a record first-half cash profit on the back of strong growth in home lending.

The two per cent lift in cash profit to A$4.91 billion (S$5.34 billion) for the six months to December, a measure preferred by financial institutions, was slightly above analysts' expectations.

Net profit was up six per cent to A$4.90 billion compared to the previous corresponding period.

Chief executive Ian Narev said the nation's largest lender was conservatively managing its balance sheet and spending amid global volatility.

But he added that the outlook for the Australian economy appeared more positive.

"The combination of geopolitical volatility and weak economic recovery in parts of the world means the risk of market volatility, and indeed economic shock, remains heightened," Mr Narev said in a statement.

"Our job as a major financial institution is to maintain a focus on the long term, whilst ensuring that we can withstand nearer term shocks."

The Commonwealth - the first of the country's big four banks to report its half-yearly earnings - declared a one percent rise in the interim dividend to A$1.99.

House price growth has continued in major Australian cities such as Sydney and Melbourne, with interest rates cut to record lows by the central bank to boost non-mining sectors following the end of an unprecedented resources investment boom.

AFP