SYDNEY – Australia’s Commonwealth Bank (CBA) reported a 10.8% drop in cash profits today, blaming the economic fallout of the coronavirus pandemic and record low interest rates.
The country’s largest lender said its statutory net profit after tax fell 20.8% to Aus$4.87 billion (RM15.24 billion), largely due to the one-off gain of a sale the previous year.
Cash profits – the bank’s preferred measure – slid 10.8% to Aus$3.88 billion (RM12.14 billion) due in part to the impact of Covid-19, including the cost of bad loans and provisions for future defaults.
The country’s central bank has also slashed the cash rate to 0.10% and embarked on a massive quantitative easing programme to stimulate the economy, suppressing mortgage interest rates.
CBA announced a final dividend of Aus$1.50 per share, up more than half from the 98 cents paid out after its full-year results last August but still down 25% from pre-pandemic levels.
Chief executive officer Matt Comyn said Australia was starting to see a turnaround in economic conditions but some cause for caution remained.
“Australia is relatively well positioned having started from a position of fiscal and economic strength,” he said in a statement.
“Although the outlook is positive, there are a number of health and economic risks that could dampen the pace of recovery.”
Australia has been relatively successful in containing the coronavirus outbreak, with some 28,000 cases and 909 deaths in a population of 25 million.
While much of the country is enjoying few restrictions, cases escaping from hotels used to quarantine returning travellers have led to snap lockdowns in recent months.
The economy contracted in the first two quarters of last year in the country’s first recession in nearly three decades. – AFP, February 10, 2021
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