CBA shares hit new record on bumper profit
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SYDNEY, Feb 13 AAP
February 13 2013, 11:09AM
Shares in Commonwealth Bank have hit an all-time high after it beat market expectations with a record first half profit.
CBA made a net profit of $3.66 billion in the six months to December 31, up one per cent on the same period in the previous year.
Its cash profit, a measure used by banks to illustrate underlying performance, was up six per cent on the previous corresponding period to a record $3.78 billion.
The bank also increased its interim dividend to shareholders by 20 per cent, a move welcomed by investors.
CBA shares were up $1.55, or 2.4 per cent, to $67.07 at 1049 AEDT.
Shares in its three major rivals - National Australia Bank, Westpac and ANZ - also posted strong gains.
CBA shares are hitting new highs every time they rise, after a steady gain that began in September 2012.
Morningstar analyst David Ellis described CBA's 2012/13 first half result as "a cracker", as analysts had been expecting a cash profit of $3.7 billion.
"Impressive momentum across all businesses delivered a six per cent increase in profit based on a five per cent uplift in revenue," he said.
"Pleasingly, there are no material adverse surprises in the interim result."
CBA's retail banking operations posted a 10 per cent rise in cash profit, due to higher income from personal loans and credit cards.
Chief executive Ian Narev said an improvement in the global economy in the six months to December had had a positive impact on debt and share markets.
He maintained a cautious outlook but did hint at improving consumer and business confidence in 2013.
"Risk remains in the economy and, as a major financial institution, we must remain cautious," Mr Narev said in a statement.
"If the current stability continues, we believe it will translate into a slow but steady rebuilding of consumer and business confidence in Australia."
The bank did not comment on future moves in its interest rates, but said its funding costs remained high due to competition for deposits among the banks.
"Deposit competition is still strong," chief financial officer David Craig said.
"It's that competition more than anything that is underwriting the costs.
"So, it is good for our 10 million deposit customers - this is a real benefit. But for our 1.6 million mortgage customers they have to pay for the cost of funding."
CBA's fully-franked interim dividend of $1.64 per share was up from $1.37 a year earlier.