Funds management helps CBA post record profit
A 23 per cent growth in funds under administration (FUA) to $152 billion helped Commonwealth Bank post a record annual net profit (NPAT) to a shade under $4 billion in 2005-06.
CBA funds management division’s underlying net profit before tax (NPBT) increased by 23 per cent to $563 million year on year.
Its Colonial First State FirstChoice platform “maintained its retail support base, attracting over 25 per cent of retail inflows in the platform market”, according to new chief executive Ralph Norris.
“First Choice has now exceeded $25 billion in FUA in less than four years,” he said.
The funds management division’s “outstanding result” contributed to an overall 16 per cent year on year rise in annual net profit to $3.93 billion.
Norris, who delivered his first result for CBA yesterday, said the bank would be a “tougher competitor, and continue to deliver both revenue growth and productivity improvements
He also attributed the result to strong growth in banking income, mainly driven by growth in home and business lending.
Shaking off the Reserve Bank’s first interest rate rise in May, Commonwealth’s home loan approvals in June jumped 37 per cent on the same period a year ago.
However, the bank did suffer an increase in bad debts in the second half, up 12 per cent to $210 million.
The bank announced a final dividend, fully franked, of $1.30, bringing the annual dividend to a record $2.24.
Commonwealth shares fell 50c to $46.30 after a strong run up this week.
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