CBA: An inconvenient profit

The June year result was broadly as expected: a 12 per cent increase in cash earnings to $8. 68 billion and a final fully-franked dividend of $2. 18 a share that took the annual payout to a 10 per cent higher $4. 01 a share.

But it is a politically inconvenient one, as the bank faces heightened scrutiny over its financial planning division and all the big banks push back against the possibility that the Murray inquiry into the financial system will recommend new curbs on their activities.

Its return on equity fell to 15. 8 per cent in 2008-09 as the crisis pushed loan losses higher, but climbed back up to 19. 5 per cent in 2010-2011 as the world and the bank climbed away from the crisis.

The broader points however are that CBA’s return on equity is climbing, better than the other 3 big banks in this market, and better than almost every other bank in the world.

Those are inconvenient facts as CBA and the banks face up to the possibility that the Murray report will recommend tighter capital controls that would crimp earnings.

Read more here: SMH


You may also like...

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>