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Bloomberg
Commonwealth Bank of Australia reported its eighth consecutive year of record profit, driven by growth in mortgage and business lending.
Cash profit, which excludes one-time items, rose 4.6 percent to A$9.88 billion ($7.8 billion) in the 12 months ended June 30, from A$9.45 billion a year earlier, the Sydney-based lender said in a filing Wednesday. That compares with the A$9.79 billion median estimate of 13 analysts, according to data compiled by Bloomberg.
“This was a good, solid performance†David Ellis, banking analyst at Morningstar Inc., said.
However, Ellis warned the results risk being “overshadowed†by allegations from the nation’s financial crimes agency that the bank breached money-laundering and terrorist-financing laws more than 50,000 times.
The board stripped CEO Ian Narev and other senior executives of their short-term bonuses after “consideration to risk and reputation matters.†Commonwealth Bank has blamed a software coding error for most of the alleged breaches.
There is a “limited†amount the bank can say about the proceedings, considering they are before a court, Commonwealth Bank said. “At this time it is not possible to reliably estimate the possible financial effect.â€
The maximum penalty is A$18 million per breach. Gaming company Tabcorp Holdings
Ltd. in March agreed to pay a A$45 million penalty to settle 108 breaches of the legislation, the biggest civil corporate penalty in Australia.
The bank has established a dedicated sub-committee of four directors to oversee its response to the suit and an upgrade of its financial-crime monitoring technology, Chairman Catherine Livingstone said.
The bank said increased competition in business lending had largely offset the benefit of home loan repricing.