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

THE STAR'S STUNNING ANSWER TO CROWN'S BARANGAROO

THE Star Entertainment Group (ASX:SGR), not to be outdone by James Packer's Barangaroo development across the ...

BRISBANE COAL TERMINAL REOPENS AFTER SHIPLOADER REPAIR

COAL loading has recommenced at New Hope's (ASX: NHC) Brisbane terminal today after repairs to its ship loader, w...

SUPERYACHTS OFFER UNTAPPED POTENTIAL AT COMMONWEALTH GAMES

SUPERYACHT Australia has devised a strategy to attract more superyachts to Queensland and capitalise on revenue op...

GDP FIGURES A 'WAKEUP CALL' FOR PARLIAMENT

THE GDP figures are an end-of-year wakeup call for Parliament about what lies ahead for the country, according to ...

Related News

HOW MCDONALD'S AUSTRALIA REDISCOVERED ITS INNOVATIVE SPIRIT

MCDONALD'S is such a ubiquitous part of the Australian landscape today that it is easy to forget how it change...

JB HI-FI IS THE GOOD GUY IN $870 MILLION ACQUISITION

ELECTRONICS giant JB Hi-Fi has formally completed its $870 million acquisition of home appliance chain The Good Gu...

ACCC ACTS AGAINST MERITON'S RIGGED REVIEWS

MERITON Property Services is under fire from Australia's main consumer watchdog, after it allegedly engaged in mi...

ACCC FIRES WARNING SHOT TO IVF PROVIDERS

IVF clinics have been put on notice by consumer watchdog, the Australian Competition and Consumer Commission (ACCC...

Contact us

Email News Update Sign Up Contact Details

Subscribe to our mailing list

* indicates required
Email Format

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter