Amid all the hype over yet another record profit for Australia's biggest bank - with cash profits of A$4.6 billion quartering to an increase of eight per cent on the previous year - a stern warning has been given by the Commonwealth Bank's chief executive, Ian Narev, over weak consumer and business confidence.
Releasing the results for the six months to December 2014, Narev acknowledged that weak confidence represented a significant economic threat and that some customers were facing challenges, but said it was not translating into credit quality deteriorations.
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Narev (pictured with CFO David Craig (l)) said business needed certainty from the government to create jobs and households needed a greater feeling of security.
"That requires implementation of a coherent long-term plan that clearly addresses target government debt levels and time frames, infrastructure priorities, foreign investment, business competitiveness policies and, above all, job creation," he said.
Global factors were also taking a toll on undermining confidence, particularly the impact of lower commodity prices on national revenue.
Narev added that a surging population, a strong construction sector, and a lower dollar meant the Australian economy had the foundations necessary to grow beyond the mining boom — but it lacked confidence.
Mr Narev said that, while home and credit card lending had grown, lending to business remained subdued and it was up to the government to create an environment in which businesses had the confidence to invest for the longer term.
Australia's central bank last week cut its forecasts for economic growth and inflation this year and warned unemployment would likely rise as the economy transitioned away from a mining investment boom.
The Reserve Bank of Australia said "gross domestic product would expand 2.25-3.25 per cent in 2015, compared with a November estimate of 2.50-3.50 per cent."
As for CBA, Narev said its ongoing focus would be on "long-term strategic priorities - people, technology, strength and productivity - continues to benefit our customers, our shareholders, our people and other key stakeholders."
"We have also maintained the strength of the group's balance sheet in terms of capital, liquidity, deposit funding and provisioning," Narev said.
"There was always going to be pressure on CBA given they are trading around record highs.
"It's almost like Icarus going a little too close to the sun," he said.