Norris shrugs off falling business share

Commonwealth Bank share of business lending fell during the 2007/08 financial year - from 12.4 to 12.2 per cent if you follow the APRA figures; or from 12.6 to 12.5 per cent if you follow the Reserve Bank figures.

(The Cannex-calculated, "derived" business banking market share much loved by St George Bank never gets mentioned by big banks.)

CBA's premium business services division, which includes commercial and institutional banking, agribusiness and CommSec, produced a modest four per cent rise in cash net profit.

Income from the group was up 15 per cent but expenses were also up 15 per cent, and loan impairment expenses were up from $75 million to $426 million. This largely reflects CBA's well known exposures to borrowers such as Allco, Babcock & Brown, Centro, City Pacific, Commander and others.

For a bank that has invested so heavily in reviving its business banking operations those numbers would not be welcome. Last year the bank put another 160 business bankers into the branches and opened eight new business banking centres.

But chief executive Ralph Norris said the drop in market share was a result of taking a tougher approach to assessing risk in the commercial market.

Norris said: "It would be easy to grow share in this environment. But we have set tight guidelines and we are comfortable with the fact that share has fallen."

Norris said 71 per cent of the bank's corporate accounts were investment grade. "Where loans were sub-optimal we have sold down or reduced our exposure."