The net profit of Commonwealth Bank - at $5.66 billion in the year to June 2010 and up 20 per cent on 2009 - isn't really a record. In fact, thanks to the continuing annoyance of BankWest and its endless bad loans, the profit is well short of a stellar return.
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Large numbers typically overwhelm any overview of big bank profits and the keen expectation of a "cash" profit in excess of $6 billion for CBA (and which it delivered yesterday) is no exception.
The net interest margin fell in the second half and growth in volume (including mild gains in market share in most markets) was not enough to offset the drag on earnings from the inescapable pressure on cost of funds as cheap, pre-GFC funding is replaced at much more expensive rates, while retail deposit margins also remain tight.
The legacy of the credit shock also continues to drag, with impaired assets continuing to climb even as the charge to the profit and loss for bad debt provisions eases (though not within BankWest).
The overall result for CBA, measured as return on equity, was down. CBA reported an ROE of 15.9 per cent in the June 2010 half year and below its own sector-leading returns that were a characteristic of its business over recent years, whatever the strife generated by the GFC.
Having helped fan expectations of a "record" profit, CBA also had to fend off election-linked talk of the need for a super profits tax.
The chatter yesterday on this point escalated from radio hosts and their talk back callers to include, albeit in a weak way, the shadow treasurer, Joe Hockey.
"The banks are going to make as much profit as they can," Opposition treasury spokesman Joe Hockey said in Sydney (and reported by AAP).
"But what it takes is a strong treasurer to stand up to them and say you need to make credit more affordable for small business and for home borrowers."
Hockey said the banks "know that when Wayne Swan challenges them about mortgage rates, it's like being slapped with a feather-duster - it doesn't hurt."
CBA's CEO Ralph Norris, pressed by reporters at the media briefing over any "out of cycle" rises in rates on home loans, had conceded that "I think the point is that, at some point, we may well have to pass on something to our customers."
His chief financial officer, David Craig, made the much less controversial point in the analysts' briefing that the bank still had plenty of business and corporate loans to reprice to restore margins and, like all banks, would continue to do so.