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Major lender Commbank reported a $9.2bn net profit after tax (including one-off items) for the full fiscal year 2017-2018, according to its latest financial results. The figure is 4.8% lower than the previous year, marking the major bank’s first profit drop in nine years.
One-off items alone totalled $778m. The bulk of this comes from the record $700m settlement with the Australian Transaction Reports and Analysis Centre (AUSTRAC) to resolve what the government body said were serious breaches of anti-money laundering and counter-terrorism financing laws. This marked the largest ever civil penalty in Australian corporate history.
Had the costs been excluded, the bank said its net profit after tax would have actually grown 3.7% to reach $10bn.
“Despite the challenges we have faced this year, the fundamentals of our business remained strong,” said CEO Matt Comyn, who reported his first annual result in the top role since starting on 9 April.
“Operating momentum was driven by our core franchise which delivered good volume margin management in home and business lending, ongoing growth in transaction accounts and deposits and continued uptake of our technology offering,” Comyn added.
Operating income grew 2.6% at $25.9bn and the net interest margin increased slightly – by 5 basis points – to 2.15% driven largely by volume growth. The bank also saw a 1.5% decline in the loan impairment expense to $1.1bn which was equivalent to 15 basis points of gross loans and acceptances. Return on equity was 14.1% and the group’s Common Equity Tier capital ratio was 10.1%, the same as the previous year and 10.7% on a pro-forma basis.
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