Scandal costs drag on CBA's $4.7b profit

Dimity Hirst

"The country's biggest bank said in a statement to the ASX this morning before trading that its cash net profit 'from continuing operations" rose 1.7% to $4.676 billion in the half, while statutory after-tax net profit including discontinued operations was $4.6 billion.

In the first earnings report since a high-profile inquiry into Australia's vastly profitable banking sector, the Sydney-based firm said it made nearly Aus$4.6 billion (US$3.3 billion) in net profit in the July to December 2018 period - the first half of the 2019 financial year.

CBA said its net interest margin dipped to a still sold 2.10%, 6 basis points lower than the first half of 2017-18, because of "higher funding costs and home loan switching and competition".

Risk and compliance related investment spending was $432 million, nearly two-thirds of total investment budget of $676 million.

CBA chief executive Matt Comyn said it was a strong outcome for the bank's core business in at a challenging time.

"Despite how hard the process has been, I am very confident that we are going to be a much better bank as a result for our customers and it is really incumbent on us to be able to demonstrate to them that we've really changed", Mr Comyn said.

Costs edged down, but to an extent this was due to significantly higher one-off regulatory and remediation costs in the prior period, including $375 million set aside for settling its money laundering fine with AUSTRAC.

"There is much work ahead", Mr Comyn said.

CBA could hand billions of dollars generated from the asset sales to shareholders, but Mr Comyn said the board won't make plans until after Chinese regulators give one of its major divestments the green light.

The result was slightly below market expectations.

That was down six percent versus the same period in the previous year.

The bank reported its earnings per share (cash basic) increased 0.9% to 265.2 cents.

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