Australia’s CBA posts 6% rise in annual profit, announces $654 million share buyback

(Reuters) -Commonwealth Bank of Australia posted a near 6% rise in annual cash earnings on Wednesday, driven by strong growth in lending volumes and a boost to its interest margins from higher rates.

The country’s biggest lender also announced a buyback of an additional A$1 billion ($653.80 million) worth of stock and declared a final dividend of A$2.40 per share, which is 30 cents more than a year earlier.

Banks saw a rebound in margins in the first half of the fiscal due to the central bank’s aggressive rate-hike actions, although there are fears of rising bad debts as their mortgage units are expected to take a hit from higher borrowing costs.

The lender warned that for the next financial year “competition, customer deposit switching and higher wholesale funding costs” could impact its margins, partly offset by the benefit of higher average cash rates.

CBA’s after-tax cash net profit was A$10.16 billion for the year ended June 30, compared with A$9.60 billion a year earlier. That compares with a Visible Alpha consensus estimate of A$10.11 billion, according to Citi.

($1 = 1.5295 Australian dollars)

Source link