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No margin squeeze for CBA after record profit

No margin squeeze for CBA after record profit

Australia’s biggest lender has achieved a record $8.6 billion profit for the 2013/2014 financial year.

CBA reported a net interest margin of 2.14 per cent, unchanged from the previous financial year despite a highly competitive mortgage market that has seen home loan rates slashed in recent weeks.

The bank recorded a net profit after tax of 12 per cent, despite a financial planning scandal that has dominated headlines in recent months.

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Released yesterday, the lender’s full-year results show an unchanged 25.3 per cent share of the Australian home loan market.

Home lending volumes grew above system at 6.7 per cent, with income from residential mortgages up 11 per cent.

Variable rate home loans accounted for 81 per cent of CBA’s mortgage portfolio, down slightly from 84 per cent the previous year.

First home buyers made up 12 per cent of home lending, down from 14 per cent.

“During this financial year, we lent over $130 billion to Australian households and businesses, held $26 billion more deposits, and increased the investments we helped manage by over $20 billion,” CBA Group chief executive Ian Narev said.

“Our Australian-based shareholders, comprising nearly 800,000 households who own our shares directly and millions more who own them through their pension funds, received over $6.4 billion in dividends, and saw the value of their investment in the Commonwealth Bank increase by over $19 billion,” Mr Narev said.

“We paid over $5.4 billion to more than 50,000 people whom we employ, continuing our commitment not to offshore Australian jobs,” he said.

While business and consumer confidence levels have remained fragile, the levels of underlying activity confirm the strong foundations of the Australian economy, Mr Narev said.

 

No margin squeeze for CBA after record profit
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