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ISCOVER
Staff Reporter
The Commonwealth Bank of Australia’s chief executive Ian Narev has said the bank is “well positioned” for the future – whatever it may bring – thanks to the group’s strong half-yearly results.
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Yesterday, the bank revealed it had achieved a statutory net profit after tax for the half year ending 31 December of $3.6 billion – 1 per cent more than at the same time last year.
“This is a strong result, which continues to demonstrate the benefits of the group’s consistent, long-term strategy. We have continued to execute a strategy that is well known to the market: a focus on the customer, disciplined management of volumes and margin, a focus on productivity, and a willingness to invest in long-term growth, particularly through technology,” Mr Narev said.
CBA is one of only a handful of global banks in the ‘AA’ ratings category.
Strong deposit growth during the period saw the bank satisfy a significant proportion of its funding requirements from high quality retail customer deposits. However, competition for deposits remains intense which had a negative impact on margins.
During the period, the group took advantage of improving conditions in wholesale markets, issuing $13 billion of long-term transactions in multiple currencies.
“Since reporting our full-year results in August last year, we have seen some improvements in the global macroeconomic environment. In each of the major areas of concern – European Union stability, US recovery and China’s ongoing growth – developments have been positive overall,” Mr Narev said.
“As a result, we have experienced a period of relative stability, which has had a positive impact on global equity and debt markets.
“Of course, risks remain in the economy, and as a major financial institution we must remain cautious. In particular, there is still no sustainable long-term plan for resolving sovereign indebtedness in Europe, and the US recovery remains fragile. And the long-term effects of the strategies of overseas central banks to restore stability are uncertain. But if the current stability continues, we believe it will translate into a slow but steady rebuilding of consumer and business confidence in Australia.”
