BANK PROFITS STALL DUE TO LOW INTEREST RATES

Written on the 8 November 2016

BANK PROFITS STALL DUE TO LOW INTEREST RATES

COMMONWEALTH Bank (ASX: CBA) statutory net profit was up 4.26 per cent at $2.4 billion for the quarter ending 30 September, the company announced today.

The bank revealed its income growth was impacted by the low interest rate environment, a strengthening Australian Dollar and higher insurance claims.

Banking income growth was solid, supported by strong trading income, but its group net interest margin was lower in the quarter, due to higher funding costs.

The Commonwealth Bank's report comes the day after Westpac also announced stalling profit growth in its full year results.

A bright spot for CBA was its wealth management business, which increased average assets under management (AUM) by 3 per cent and funds under management (FUM) by 2 per cent, driven by stronger investment markets.

In terms of credit quality, the loan impairment expense (LIE) was $322 million in the quarter, equating to around 0.18 per cent of gross loans and acceptances, compared to 0.19 per cent in FY16.

Consumer LIE was up, driven by stress in areas of WA and Queensland due to the mining downturn.

Group troublesome and impaired assets were higher at $6.8 billion, compared to $5.5 billion in the previous corresponding period, which the company says reflects "ongoing stress in the New Zealand Dairy sector".

Commonwealth Bank is trading down 0.97 per cent at $71.830 per share this morning.


Latest News

SUPER RETAIL GROUP SAYS GOODBYE TO AMART SPORTS BRAND

A BRAND synonymous with Australian sporting goods, Amart Sports, will be retired from 1 November 2017. Super R...

SUPREME COURT GRANTS LEAVE FOR CLASS ACTION AGAINST DICK SMITH

A CLASS action law suit against Dick Smith has been given the green light for shareholders impacted by the company...

NEXTDC SHARES SOLD OFF AS ONGOING SPAT WITH 360 CAPITAL CONTINUES

SHAREHOLDERS in data centre operator NextDC (ASX: NXT) have dumped their stock in the company as its ongoing war of w...

SURVEY SAYS COUNTEROFFERS MIGHT BE A WASTE OF MONEY

TO RETAIN the best and brightest employees it sometimes seems like a good idea to offer more money, but recent res...

Related News

SUPER RETAIL GROUP SAYS GOODBYE TO AMART SPORTS BRAND

A BRAND synonymous with Australian sporting goods, Amart Sports, will be retired from 1 November 2017. Super R...

SUPREME COURT GRANTS LEAVE FOR CLASS ACTION AGAINST DICK SMITH

A CLASS action law suit against Dick Smith has been given the green light for shareholders impacted by the company...

NEXTDC SHARES SOLD OFF AS ONGOING SPAT WITH 360 CAPITAL CONTINUES

SHAREHOLDERS in data centre operator NextDC (ASX: NXT) have dumped their stock in the company as its ongoing war of w...

SURVEY SAYS COUNTEROFFERS MIGHT BE A WASTE OF MONEY

TO RETAIN the best and brightest employees it sometimes seems like a good idea to offer more money, but recent res...

BOOK YOUR FUNCTION SPACE HERE

 

 

 

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter