AUSTRAC fine sees CBA profit decline
Recent adverse events, particularly the $700 million AUSTRAC civil penalty, have seen the Commonwealth Bank take a hit with full-year net profit after tax down four per cent to $9,375 million.
Releasing the big banking group’s full-year results to the Australian Securities Exchange today, Commonwealth Bank chief executive, Matt Comyn said that despite the challenges, the fundamentals of the business remained strong.
The CBA board declared a final dividend of $2.31 per share, with a full-year fully franked dividend of $4.31, up two cents over that of 2017.
The CBA full-year results contained a confirmation that the big banking group intends to demerge its wealth management and mortgage broking businesses but noted that wealth management cash net profit after tax for the full year ended 30 June actually increased by 31 per cent to $723 million.
It said the result had been driven by nine per cent growth in funds management income, 51 per cent growth in insurance and three per cent higher operating expenses.
However, the bank’s decision to demerge the wealth business appeared to be validated by the fact that the bank experienced lower advice review program.
The intention to demerge the wealth management business was reflected in Comyn’s comments when he said CBA was seeking to build a simpler, better bank.
“We are simplifying our portfolio, operating model and processes to deliver better customer, efficiency and risk outcomes,” he said.
“This will be underpinned by stronger capabilities in operational risk and compliance management, cost reduction, data and analytics and a continuing commitment to innovation and customer service,” Comyn said.
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