Poor culture, storms, hold wealth back

CBA's funds management income for the year ended 30 June 2015 was flat on a "headline" basis at A$1.94 billion. Excluding the impact of property transactions and businesses from the comparative results, income increased by eight per cent, on the back of 14 per cent increase in average funds under administration.
 
This was mainly due to three factors, according to CBA's chief financial officer David Craig, who said: "markets are up; foreign currency income has been favourable, particularly for offshore funds; and 90 per cent of the Colonial First State Global Asset Management funds are performing above benchmark.
 
"That led to better flows and, of course, performance fees."
 
Colonial First State's otherwise positive scorecard was offset by mediation costs associated with its financial planning business. The Open Advice Review program had, by its closing date, received 7000 completed registration forms and 23,000 expressions of interest.
 
CEO Ian Narev wouldn't be drawn on how much this had cost CBA so far, demurring with the comment: "It might be important on an individual basis, but not from a shareholder perspective" - in other words, not a large amount, relative to the other numbers.
 
Insurance income was down five per cent on a headline basis, although CFO David Craig argued that taking a long-term view  (for instance, comparing this year's result with that from the last five or six years), the previous financial year had seen very abnormal costs.
 
Insurance income decreased three per cent due to an unusually large number of storm claims during the year in New South Wales and Queensland, adding about $108 million extra expense.
 
Expenses in this area also reflect greatly increased compliance costs.