Kelly Bayer Rosmarin, head of institutional banking at Commonwealth Bank, used an interview with The Australian to counter suggestions of languid returns in the division."CBA insto banking a money pit" read the headline in Banking Day on August 11. We reported institutional banking has been more a money pit than a profit centre for Commonwealth Bank lately, with an investment program driving costs higher.While the loan impairment expense is most often the swing factor in the performance of this division, discretionary cost increases of 11 per cent, or A$111 million, exceeded the rise in loan losses in institutional banking over the last year.CBA said that this investment program had passed its peak.The rise in loan losses (in keeping with sector trends) was $85 million (up 50 per cent on the year before), with "a small number of large individual provisions" - code for loans to resource company borrowers and select dairy farmers - accounting for most of this.As a result the cash profit for CBA's institutional bank fell nine per cent over 2016 to $1.16 billion.Rosmarin, The Australian reports, responded with a claim that the strategy was producing industry-leading returns and many of the headwinds lashing the sector wouldn't last forever, including the hot competition from Asian rivals awash with cash.Rosmarin, 37, who was appointed to run the division in December 2013, told the newspaper the market lacked understanding of how CBA's institutional strategy differed from rivals. She said returns remained above the unit's cost of capital, despite several industry headwinds. "People are nervous about the returns that can be generated on a sustainable basis out of institutional businesses and they have good reason to be concerned if you look at the global performance and the ROEs (return on equity) that are out there," Rosmarin told The Australian."(But) I think we've been very clear this business returns above the cost of capital and we intend to keep it that way … through the cycle. That doesn't mean there aren't points in the cycle where it's really tough for all institutional businesses …(like) right now."But if you think about it, if you step back and say every institutional business is finding it tough to make returns, they're all going to look for ways to improve those returns, that's a pretty good spot to be in if we are already above the cost of capital. "We're very well positioned to capitalise on what comes next."Rosmarin added CBA's business was more weighted toward higher-value structured products for clients, such as project finance, which "extracts better returns than plain vanilla lending" from the use of the group's balance sheet. She said her strategy was "industry focused, not geography focused," allowing the bank to be "very picky and choosy" about which clients it wanted to deal with. "We're not driving our business to say 'we've got 100 people in London, drum up some business'," she said. "If there aren't great deals to do in London, we'll just sit out of the market while the risk