Commonwealth Bank of Australia (CBA) has posted cash profit of AUD4.73bn ($3.7bn) for the first half ended 31 December 2017, a fall of 2% compared to AUD4.83bn ($3.8bn) reported a year ago.
The results were impacted by an AUD375m provision to cover AUSTRAC’s fine for alleged money-laundering as well as AUD200m provision set aside for costs to be incurred in various regulatory proceedings, including the Royal Commission.
Total operating income for the first half of fiscal year 2018 was AUD13.12bn, up 2% from AUD12.83bn a year ago.
The group’s net interest income was AUD9.25bn, an increase of 6% over AUD8.71bn reported in the year ago half. Operating expenses increased 5% year-on-year to AUD5.76bn.
As at 31 December 2017, the group’s common equity tier 1 (CET1) ratio was 10.4%.
Cash profit at the bank’s wealth management division for the six months to December 2017 was AUD281m, a decline of 33% from AUD211m a year earlier.
Cash profit at the business and private banking unit of the bank increased 9% to AUD960m from AUD878m a year ago.
CBA CEO Ian Narev said: “This result underlines the continued impact of our strategy of investing in our people and technology. Customer satisfaction has remained high, and customers are doing more with us, with transaction account volumes a stand -out. Combined with disciplined margin management, on – going productivity and stable credit quality, this has again produced industry – leading underlying performance.
“We have taken a significant provision for regulatory and compliance costs, consistent with accounting standards. We have also taken a $ 375 million expense provision which we believe to be a reliable estimate of the civil penalty a Court may impose in the AUSTRAC proceedings. We recognise, and regret, that these costs arise from our failure to meet some standards that we should have. We will continue to work hard to do better.”