The Commonwealth Bank of Australia today announced a record profit of $3.34 billion for the first half of FY2011, or a 13% increase. The results came in above most analysts forecasts of $3.2 billion to the end of December 2010.
Shares of CBA are currently trading at $54.91 up $1.02, or 1.84% since market open. This has created a 9 month high since July last year. The bank has warned though not to assume Australias economy is all rosey, as many sectors are not benefiting from the current commodities boom.
“While the Australian economy continued to perform well, the banking industry faced a number of headwinds,” CBA chief executive Ralph Norris said.
“Underlying credit growth remains subdued with both consumer and corporate confidence fragile. Competition is intense with depositors benefiting from historically high margins while wholesale funding costs also remain at elevated levels,” Mr Norris said.
“The outlook for the domestic economy remains positive as the resource sector continues to outperform, however some of our customers operating in other sectors of the economy are finding business conditions more challenging”.
As the Australian and global economy recovers, bad debts for CBA have been reduced, significantly contributing to the extremely positive result.
The record profit has allowed CBA to increase the interim dividend to shareholders by 10% to $1.32 per share.