Commonwealth Bank reports surge in profits

[SYDNEY] Australia's Commonwealth Bank reported an almost 20 per cent rise in full-year profits on Wednesday, citing the country's economic rebound after earlier pandemic lockdowns for the turnaround.

The country's largest lender said after-tax cash profits soared A$8.65 billion (S$8.64 billion) in the 12 months to June 30, as it cut provisions for loan losses after Australia's economy recovered from a pandemic-induced recession.

The bank said it would embark on an A$6 billion share buyback and increased its final shareholder dividend to A$2.00 a share.

That was more than double the A$0.98 paid out in the same period last financial year, when profits fell due to the impact of the coronavirus crisis.

But the latest result did not reflect a prolonged lockdown of Australia's biggest city, Sydney, which is expected to last more than two months and estimated to cost the economy billions of dollars.

Economists have predicted the country is likely to record at least one quarter of negative growth.

CBA chief executive Matt Comyn said the bank anticipated "ongoing economic impacts" as well as pressure on earnings from lower interest rates.

"We are prepared for a range of different economic scenarios and are well placed to support our customers," he said in a statement.

"We're committed to new and ongoing support measures for those most impacted by Covid-19 and other events."

The economy contracted in the first two quarters of last year in the country's first recession in nearly three decades.

In response, Australia's central bank cut the cash rate to a record low 0.10 per cent as part of a suite of measures to stimulate the economy.

AFP