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.”
Recommended for you
Money Management spoke with two brand consultants to how Perpetual can best rebrand its business as the 138-year name is sold to private equity firm KKR.
Pinnacle remains a “standout” fund manager, according to Morningstar, amid a challenging backdrop for active asset management and the addition of a new global equities affiliate from the UK.
Platinum Asset Management saw outflows of $1.65 billion in April, partly as a result of redemptions from institutional mandates and product rationalisation initiatives.
In this latest Meet the Manager profile, Money Management speaks with Ophir Asset Management co-chief executive Andrew Mitchell.