The Group has today unveiled a 23 per cent uplift in its cash profit for the first half of its 2022 financial year, supported by lower loan loss provisions due to an improved economic outlook, and continued customer focus and disciplined operational execution leading to above system volume growth in core products.

This strong result, together with the bank’s continued capital and balance sheet strength, has allowed the Board to declare an interim dividend of $1.75 per share, up 17 per cent on the interim dividend in the prior year.

Following the successful completion of a $6 billion off-market share buy-back, CBA now intends to continue capital management actions via an on-market share buy-back of up to $2 billion.

In a statement to the ASX today (Wednesday 9 February 2022), CBA said the intended on-market share buy-back of up to $2 billion reflects its disciplined and balanced approach to capital. The bank’s strong capital position creates flexibility to support customers and manage ongoing uncertainties, while continuing to return surplus capital to shareholders.

CBA’s banking businesses continued to perform well in a low rate environment, with strong, above market volume growth in core products supporting operating income growth of 2 per cent compared to 1H21. This was partly offset by lower net interest margins, which decreased 5 basis points excluding the impact from increased lower yielding liquid, mainly due to unfavourable impact from customers switching to lower margin fixed rate loans, the impact of swap rates on fixed rate loans, and continued home loan competition.

Operating expenses were flat at $5.6 billion, with increased staff costs – mainly driven by higher staff numbers to support increased operational volumes and the delivery of the bank’s strategic priorities – offset by lower occupancy, IT and remediation costs.

The strong pre-provision operating performance growth of 4 per cent and a significant reduction in loan impairment expenses – reflecting an improved economic outlook – contributed to the improved bottom line result, CBA said.

Matt Comyn, CBA’s Chief Executive Officer, said: “The Bank has delivered a strong financial result in a low rate environment. This has been achieved through continued customer focus and disciplined operational execution,” Mr Comyn said. 

“Higher cash profits were a result of continued volume growth across the business in home lending, business lending and deposits lower loan impairment expense due to the improving economic outlook, and a reduction in remediation expenses.

“We have continued to invest in operational execution and the ongoing strengthening of our business, consistent with our strategic priorities.”

Among the highlights were:

  • Above system (market) growth in home loans (up 8.5 per cent with a $40.4 billion increase in the 12 months to December 2021), household deposits (up 12.2 per cent), business lending (up 12.5 per cent and $13.2 billion higher) and business deposits (up 14.1 per cent and $21.0 billion higher).
  • The Group maintained strong balance sheet settings and remains 73 per cent deposit funded.
  • Arrears on home loans and consumer finance remain low, reflecting improved economic conditions and improved customer origination quality. Provisioning coverage remains strong with the provision coverage ratio at 1.50 per cent.  
  • Good progress made on building tomorrow’s bank today with new products and services in the pipeline.
  • Ongoing support for customers and communities throughout the pandemic and as the economic recovery continues (7 million visits to the group’s COVID support page, provision of vaccination hubs around Australia, 1.8 million customers contacted regarding natural disaster, $200 billion raised in funding for Australian clients, $60 billion in new business lending).