The performance of the Commonwealth Bank’s wealth management business has helped drive a record interim dividend of $1.13 fully franked on the back cash net profit after tax of $2,385 million for the six months ended December 31.
The bank said that the wealth management business had delivered a strong result with a 27 per cent increase in cash net profit after tax to $380 million, and funds under administration had increased 24 per cent to $200 billion, “driven by the success of the FirstChoice platform, cash mandates from institutional investors and good investment performance”.
It said that CommInsure generated strong personal life and general insurance sales, with the latter having been driven by a significant improvement in cross-sell rates.
Commenting on the bank’s performance, chief executive Ralph Norris said he was satisfied with the result in what had been a difficult environment for the financial services sector.
However, looking over the horizon, the bank said that the increased volatility in global financial markets that had characterised the first half of the group’s financial year was expected to continue until at least the end of the current financial year as the full impacts of the sub-prime crisis flowed through to the market.
It said for the Australian economy this was likely to mean that wholesale funding costs would remain above levels experienced in the 2007 financial year and inflation would continue to be a concern.
The bank said this was expected to lead to further upward pressure on interest rates.
