The Commonwealth Bank has notched up a $9.6 billion profit and will lift its dividend, after the banking giant’s bottom line benefited from solid loan growth and cuts to its bad debt charges.
As CBA delivered its full-year results on Wednesday, chief executive Matt Comyn said households were in a strong position in a challenging economy, but the bank expected a softening in consumer spending amid rising costs of living.
“Against many measures, Australian households and businesses are in a strong position given low unemployment, low underemployment, and strong non-mining investment. However inflation is high, and we have seen a rapid increase in the cash rate which is negatively impacting consumer confidence,” Comyn said.
“We expect consumer demand to moderate as cost of living pressures increase. It is a challenging time, but we remain optimistic that a path can be found to navigate through these economic conditions.”
In what Comyn said was a “strong” result for shareholders, CBA’s cash profits rose 11 per cent to $9.6 billion. The improvement in its bottom line was helped volume growth in its core businesses, lower costs, and a $357 million loan impairment benefit.
CBA is increasing its final dividend by 10 per cent to $2.10 a share, and the payment will be fully-franked and paid on September 29.
The consensus forecast among analysts had been for cash earnings of $9.24 billion, according to Citi, and a final dividend of $2.09.
CBA’s result comes as investors are focused on how banks are being affected by rising interest rates, which have sparked fears of bad debts, and alongside a slowdown in the property market, which is a critical influence on banks’ loan growth.