Commonwealth Bank posts $5 billion cash profit after closing more than 350 branches in past five years
The Commonwealth Bank has announced a $5 billion cash profit after closing 354 branches and removing 2,297 ATMs in just five years.
Australia's largest housing lender's half-year result disappointed financial markets, with CBA warning that higher interest rates were likely to leave more borrowers struggling to repay their mortgages in 2024.
Net cash profit of $5.019 billion, for the period July to December 2023, was three percent weaker compared to the same six-month period in 2022, and included the Reserve Bank cutting interest rates in November for the 13th time in 18 months increased.
The market had expected CBA to post a net cash profit of $5.1 billion, even though interest rates are now at a 12-year high of 4.35 percent.
CEO Matt Comyn said cost-of-living pressures meant Australian consumers continued to cut back on spending during the first six months of the 2023-2024 financial year.
“Twenty-three has become increasingly challenging for many of our customers, who are finding it more difficult to meet cost-of-living pressures,” he said.
Mr Comyn said the Commonwealth Bank expected more borrowers to fall behind on their mortgage repayments, with variable interest rates now typically starting with a 'six'.
“As increases in cash rates have a delayed impact on households and business customers, we expect financial pressures to continue into 2024, with an increase in our delinquencies and impairments,” he said.
Commonwealth Bank has announced a cash profit of $5 billion, which is lower than market expectations and comes after the bank closed 354 branches and removed 2,297 ATMs in the past five years.
However, shareholders continued to benefit, receiving a dividend of $2.15 per share, which was two percent higher than the corresponding period in 2022.
The bank's net profit margin, or the difference between its financing costs and what it charges for loans, fell 11 basis points to 1.99 percent in the July to December 2023 period compared with the same six-month period in 2022.
CBA attributed the decline to increased competition, higher financing costs in the wholesale market and customers switching to higher-yielding deposit accounts to take advantage of higher interest rates.
Earlier this month, Daily Mail Australia revealed that CBA had closed 354 branches in the past five years and plans to close a further three branches in populated areas of three major cities next month.
Despite record profits, Australia's largest housing provider has closed a third of its branches since June 2018, when 1,082 were still operating.
CEO Matt Comyn said cost-of-living pressures meant Australian consumers continued to cut back on spending during the first six months of the 2023-2024 financial year.
Due to a sharp decline in the use of cash, the CBA also removed 2,297 ATMs during that period, representing a 54 percent decline or halving of the number of banknote machines compared to the 4,253 in mid-2018.
The bank now plans to close its Rundle Mall branch in central Adelaide on March 1, along with branches in Coolangatta on the Gold Coast and Coogee in Sydney.
“Following a recent review, we have made the difficult decision to permanently close our branches in Rundle Mall Adelaide, Coolangatta and Coogee,” a spokesperson told Daily Mail Australia.