Commonwealth Bank has reported a record half-year profit of $5.15bn as it faces political pressure along with other big banks over interest rates and regional branch closures.
Australia’s biggest retail bank announced its financial results for the six months to December 31 on Wednesday, confirming its cash profit after tax had increased by 9 per cent from a year earlier.
CBA increased its operating income by 12 per cent to $13.59bn. Its net income from interest increased by 19 per cent as lenders reap the rewards of soaring interest rates.
The bank attributed the boost to net income from interest primarily to the “rising rate environment” as well as “organic volume growth” in home, business and institutional loans.
It said its operating expenses rose by 5 per cent over the same period as a result of inflation, higher staff numbers, IT and remediation costs.
The CBA’s announcement comes a day after it said it would temporarily stop shutting down regional branches until a parliamentary inquiry into the issue is complete.
A Senate committee will respond to the announced closure of more than 80 branches of different banks across Australia since September last year.
The inquiry, which is due to report back to the Senate on December 1, will examine the effects of bank closures on customers and regional communities.
The CBA will halt its impending closures of branches in Bright in Victoria and Junee in NSW, with the other big banks being urged to follow suit.
Australia’s banks have also been put on notice to ensure they are passing on interest rate hikes to customers with savings accounts.
The RBA raised the cash rate — which guides interest rates set by lenders — by a further 25 basis points to 3.35 per cent earlier this month in its ninth consecutive increase since May last year.
Treasurer Jim Chalmers has tasked the competition watchdog with investigating deposit pricing, saying deposit holders should experience the “silver lining” of rising interest rates.
“It’s a fact that banks have been a lot slower to pass on the increases in interest rates to savers than to mortgagees,” Dr Chalmers said on Wednesday.
The Australian Competition and Consumer is expected to release an issues paper in the coming months and report back to Dr Chalmers by December 1.
Australian households together hold more than $1.3tn in savings and deposit accounts.
In a letter sent to shareholders on Wednesday, CBA chief executive officer Matt Comyn and chair Paul O’Malley said the bank had increased interest rates “across a number of our savings products”.
Story Credit: news.com.au