Commonwealth Bank rises on record FY cash profit

Shares in Commonwealth Bank of Australia were climbing on Wednesday after the bank reported record profit for the financial year, helping soften the blow of recent falls prompted by allegations it violated money laundering laws.

The bank’s Sydney-listed stock rose as much as 1.4 per cent to A$81.78 a share in morning trade after it reported in its annual earnings report that cash profit, the preferred measure of bank performance in Australia, rose 4.6 per cent to a record A$9.88bn ($7.78bn) in the twelve months to June 30.

That bested an average forecast of $9.8bn from analysts polled by Bloomberg.

CBA said its loan impairment expense had fallen 12.8 per cent year on year, due primarily to lower provisioning in its institutional banking and markets segment as well as in business and private banking.

The bank also declared a final dividend of A$2.30 per share for a full-year dividend of A$4.29, up 2 per cent from the 2016 financial year.

CBA on Tuesday cut the pay of senior executives and non-executive directors after the Australian Transaction Reports and Analysis Centre sued the bank last week for more than 50,000 alleged breaches of money laundering and counterterrorism laws. Sydney listed shares in the bank are still down 2.8 per cent since the suit was announced.