Australian banking giant Commonwealth Bank of Australia (CBA) has reported a 6% decline in its statutory net profit after tax (NPAT) for fiscal 2024, reaching $9.48 billion. The decrease in profits can be attributed to lower lending and deposit margins, increased competition, and an unfavorable portfolio mix. The bank also saw a 2% decline in its cash NPAT figures, totaling $9.84 billion.
CBA highlighted increased competition and lower deposit earnings as key factors contributing to the decline in profits. The bank faced challenges with customers switching to higher-yielding deposits, resulting in an unfavorable portfolio mix. Additionally, increased wholesale funding costs added to the overall decline.
Within CBA’s retail banking services segment, there was a 4% slide in profits, amounting to $5.36 billion. However, the business banking division experienced growth of 4%, reaching $3.77 billion, and the institutional banking and markets division rose by 5% to $1.1 billion.
Matt Comyn, the chief executive of CBA, acknowledged the resilience of the Australian economy, noting low unemployment, private and public investment, and strong exports as supporting factors. However, he also highlighted downside risks such as productivity, housing affordability, and global uncertainty. Despite these challenges, Comyn expressed confidence in CBA’s ability to stimulate economic growth by lending to productive sectors.
CBA announced a full-year dividend of $4.65 per share, fully franked, representing a 3% increase from the previous year. This demonstrates the bank’s commitment to delivering value to its shareholders.
Meanwhile, CBA’s New Zealand operations under the ASB brand experienced a 10% drop in cash NPAT, amounting to $1.19 billion. The decline in profits can be attributed to challenging economic conditions, with ASB’s lending growing by only 1%. However, total customer deposits increased by 5%.
Vittoria Shortt, the chief executive of ASB, acknowledged the difficult environment faced by borrowers in New Zealand. The bank has been working closely with customers to provide support during these challenging times. ASB has implemented various initiatives to support the country’s productivity and promote social and environmental transformation. These initiatives include partnering with Rewiring Aotearoa to explore opportunities for transitioning homes and farms to renewable energy and launching the Clean Tech Fund to support early-stage companies focused on reducing emissions and improving resource utilization. ASB has also invested in AgriZeroNZ to assist farmers in lowering agricultural emissions while maintaining profitability.
Despite the challenges faced by CBA and ASB, both banks remain committed to supporting their customers and contributing to economic growth. With their strategic initiatives and focus on productivity and sustainability, they are well-positioned to navigate through uncertain times and continue delivering value to their stakeholders.
 in fiscal 2024, attributed to factors such as increased competition and an unfavorable portfolio mix. Despite challenges, CBA remains committed to supporting customers and stimulating economic growth. Read more here.){kind=link}