Commonwealth Bank share price: Q3 profit slides amid hefty remediation costs
Australia’s biggest lender, Commonwealth Bank of Australia (CBA) has reported a lower cash profit for Q3, after the bank was hit by higher customer compensation charges
The charges come in relation to the landmark royal banking commission inquiry, which hit all four of Australia’s big banks with remediation costs.
Commonwealth Bank share price
Commonwealth Bank of Australia shares fell 1.75% at time of writing, responding to the Q3 loss.
The bank’s share price fell to $73.63 at time of writing, falling from $75.48 at previous close.
Commonwealth Bank key figures
Q3 Cash earnings from continuing operations fell to A$1.70 billion, compared to cash earnings of A$2.35 billion a year ago.
CBA said it set aside an extra A$714 million to compensate aggrieved clients during the quarter. Net profit fell about 24% to A$1.75 billion.
The group's common equity tier 1 ratio stood at 10.3%, excluding the 200 cents per share interim dividend.The bank announced in February this year that it would expected a weaker than expected profit due to rising costs and fierce competition.
Banking inquiry remediation costs
CBA and the "Big Four" banks are set to spend millions in compensation charges, while also mending their reputation, after the findings of the enquiry showed that the banks had failed to pay customers what they were owed.
CBA put its demerger of its wealth management and mortgage broking units on hold, in order to focus on refunding customers, mitigating past "issues" and implementing some of the recommendations from the year-long inquiry
Australia and New Zealand Banking (ANZ) bank decided on Friday to cut fixed mortgage rates. CBA has cut the fees it charges customers as part of a series of customer-focused measures to reduce its annualised income by A$415 million.
Leadership changes
Commonwealth Bank of Australia also announced on Monday that Sir David Higgins will retire as its non-executive director on 31 December 2019.
The bank said, Sir David’s decision to retire was “reflective of the time commitment required for the Board.”
Sir David had been a Director of the Bank since September 2014.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Act on share opportunities today
Go long or short on thousands of international stocks with spread bets and CFDs.
- Get full exposure for a comparatively small deposit
- Trade on spreads from just 0.1%
- Get greater order book visibility with direct market access
See opportunity on a stock?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Take your position
- See whether your hunch pays off
See opportunity on a stock?
Don’t miss your chance – upgrade to a live account to take advantage.
- Trade a huge range of popular stocks
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See opportunity on a stock?
Don’t miss your chance. Log in to take advantage while conditions prevail.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
