Remediation costs weigh on profits at Commonwealth Bank
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.”
AUTHOR
Laura Dew
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