Remediation costs weigh on profits at Commonwealth Bank

commonwealth-bank/banking/Big-four-banks/

13 May 2019
| By Laura Dew |
image
image image
expand image

Commonwealth Bank has reported a 28 per cent fall in cash profit from continuing operations of $1.7 billion for the three months to 31 March as a result of paying out $714 million in customer remediation.

This compared to an average during the first two quarters of the year of $2.3 billion.

The big four bank, which is Australia’s largest bank, said the remediation consisted of $334 million for Aligned Advice remediation, $72 million for wealth customer refunds, $152 million in banking customer refunds and $156 million in other costs.

The total costs paid out by the bank so far were $2.17 billion with the majority of this, some $1.7 billion, paid out to wealth management customers.

Statutory net profit was $1.75 billion while operating income was down four per cent due to seasonal impacts and temporary headwinds.

Chief executive, Matt Comyn, said: “We continue to make progress on our strategy to become a simpler, better bank. While headline profitability was impacted by higher remediation provisions, our sound business fundamentals ensure we remain well-placed in a challenging environment, highlighted in this quarter by volume growth in our core businesses, a strong capital position and continued balance sheet strength.”

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

5 months ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

5 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

7 months 1 week ago

The FSCP has issued a written direction to an adviser who charged clients “extraordinary fees” for inappropriate and conflicted advice, as well as encouraged them to swit...

1 week 5 days ago

ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager. ...

3 weeks 1 day ago

ASIC has confirmed the industry funding levy for the 2024–25 financial year, and how much licensees can expect to pay....

2 days 18 hours ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
2
DomaCom DFS Mortgage
95.46 3 y p.a(%)
5