CBA Has Strong First Quarter

Post by Sharat on November 9, 2009 · Under Australian Economy, Business News, Capital Markets, Company News, Equities, banking · Comment

Australian banking major, CBA, in a trading report said its unaudited profits during the first quarter surged to $1.4 billion, boosted by a strong performance in its wealth management unit, and savings wrung out from cost control.

CBA’s credit impairment charges stood at $700 million for the quarter ending September 30th and were in line with expectations.

Cash earnings are a closely watched measure that strip out volatile items.

Shares of the lender outpaced the broader based ASX 200 on Monday, with the trading report following on the heels of earnings announcements by its three main rivals, which show robustness in the Australian banking industry.

“The group performed strongly through the quarter, with good income growth and continued cost discipline across the organization,” CBA chief executive Ralph Norris said.

Mr. Norris was careful to point out however, that business conditions continue to remain challenging, and was uncertain about the extent of the recovery in economic conditions.

Wealth management was responsible for driving the lenders earnings during the first quarter, as equity markets recovered. Mr. Norris sounded a note of caution and said the result may not be repeated in the future.

“Our capital, provisioning, funding and liquidity levels all remain very strong,” Mr. Norris said.

CBA’s wealth management unit has seen an 8.3 per cent increase in assets under management to $190 billion, whilst net outflows were $2.3 billion.

Mr. Norris said that intense competition for deposits would continue and added that CBA’s institutional banking and markets arm, and business and private banking arms, performed well in a slowing credit market.

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