Commonwealth Bank of Australia CEO sees weak private sector
Commonwealth Bank of Australia’s profit met analyst estimates as strength in its key home lending business offset concern from chief executive officer Matt Comyn that economic conditions remain fragile.
Cash profit from continuing operations came in at A$5.13 billion ($3.23 billion) in the six months ended Dec. 31, the country’s biggest bank said in a statement Wednesday, broadly in line with analyst expectations.
Australia’s biggest lenders are facing a transition phase, with the nation’s central bank potentially on the cusp of moving to a cycle of interest rate cuts that could weigh on margins. That comes at a time of intense competition for mortgages and a deteriorating outlook for the economy.
“The Australian economy has slowed considerably, with cost of living pressures continuing to weigh on consumer demand and younger customers in particular making real sacrifices,” Comyn said in the statement. “Private sector growth is weak, immigration is starting to slow and geopolitical uncertainties remain.”
The firm’s shares added 0.9% as of 12:12 p.m. in Sydney and are on course for a record closing high. They remain up about 41% over the past year and the bank’s price-earnings valuation leaves it as one of the most expensive in the world. Commonwealth Bank accounts for about a quarter of all the nation’s mortgages.
Source: FORTUNE