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Australia's CBA first-half profit surges 16%

AFP

Commonwealth Bank building is pictured in the central business district of Sydney, on August 14, 2013Commonwealth Bank building is pictured in the central business district of Sydney, on August 14, 2013

Commonwealth Bank building is pictured in the central business district of Sydney, on August 14, 2013Commonwealth Bank building is pictured in the central business district of Sydney, on August 14, 2013

Australia's largest lender Commonwealth Bank on Wednesday posted a bumper 16 percent spike in first-half net profit to Aus$4.21 billion (US$3.80 billion), with all of its businesses delivering strong performances.

CBA's result for the six months to December 31 was up from Aus$3.66 billion in the same period the previous year. Its cash profit, a measure often preferred by financial institutions, jumped 14 percent to Aus$4.27 billion, above expectations.

The result initially sent the bank's shares higher but by later morning they had drifted marginally lower to Aus$75.48.

Chief executive Ian Narev said the strong result again demonstrated the benefits of the bank's long-term strategic priorities, which he defined as "people, technology, strength and productivity".

"All of our businesses have performed well," he said, adding the bank had "used our leading technology platform to deliver innovative products and services to business and personal customers."

"The strong revenue growth we have achieved, in what has been a period of relatively subdued economic activity, demonstrates the success of our commitment to meeting the needs of our customers."

He added that the bank was "cautiously optimistic" about the economic environment in the year ahead, although he warned that volatility in global markets continued to supress business confidence.

There was also little evidence that Australia's non resource sectors, other than housing, were significantly improving.

But with growth forecasts for developed economies improving, consumer spending over the holiday season higher than last year and corporate balance sheets remaining strong, the outlook was positive.

"We will stick to our proven strategy, and maintain business settings that reflect both the risks and the opportunities of this economic environment," Narev said.

Morningstar analyst David Ellis said the result exceeded expectations and was another consistently strong performance from the bank.

"There were no adverse surprises... with all key earnings drivers -- loan growth, net interest margins, fee and trading income, cost control and bad debts -- underpinning our positive long term view," he said.

The lender declared an interim dividend of Aus$1.83, a 12 percent increase from the same period in the previous year.

Date created : 2014-02-12