Home loan growth up 7.4%
Commonwealth Bank of Australia has posted cash net profit after tax over the financial year of $9.6bn, an 11% rise on FY21.
Releasing its FY22 results on Wednesday morning, which cover the year to June 30, CBA said its strong financial result was due to a continued focus on customers and operational and strategic execution.
Across the bank’s core businesses, home lending grew by 7.4% over FY22 compared to FY21, an increase of $36.4bn. System growth for its home lending business was 0.9 times.
Business lending was up 13.6% ($15.4bn), household deposits were up 13.2% ($40.9bn), and business deposits were up 15.1% ($23.9bn) on FY21, the bank reported.
From a credit quality perspective, the bank said its asset portfolio remained sound. Consumer arrears (covering home loans, credit cards and personal loans) all remained low as a result of good origination quality, low unemployment, and significant household savings buffers, it said.
Operating income was $24.4bn, up 1%, which CBA said was driven by volume-related growth in its core products. Growth was partially offset by a decrease in net interest margin, down 18-basis points to 1.9%.
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The drop in net interest margin was due to a large increase in low yielding, lower home loan margins, and was partially offset by increased deposit earnings, the bank said.
Operating expenses came in at $11.2bn, down 1%, which CBA said reflected lower remediation costs and productivity benefits. The reduction was partially offset by higher staff costs, it said.
CBA CEO Matt Comyn (pictured above) said the operating environment had changed significantly during the financial year. As people adjusted to living with COVID-19, the economy recovered strongly, he said.
“However, many of our customers have been impacted by devastating natural disasters and rising cost of living pressures. Around the world geopolitical tensions have created additional uncertainty in financial markets,” Comyn said.
The bank had focused on strengthening relationships with customers, which he said resulted in growth in deposit and lending volumes to household and business customers.
“Our operating performance was higher as a result of this continued volume growth and profitability was further supported by sound portfolio credit quality,” Comyn said.
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Loan impairment expense was a benefit of $357m over FY22, a decrease of $911m. The decrease was driven by reduced COVID-19 overlays, which were partly offset by increased forward looking adjustments, for emerging risks such as inflation, supply chain disruptions and interest rate rises.
Deposits from retail, business and institutional customers accounted for 74% of total group funding, the bank said.
CBA ended the 2022 financial year with a common equity tier 1 (CET1) capital ratio of 11.5%, down 160-basis points on FY21.
The outcome of the consistent operating performance will see shareholders receive a final dividend of $2.10 per share. This took the full year divided to $3.85 per share, fully franked, up 10% on FY21.