Wednesday 11th February 2009 |
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The bank kept its first-half dividend unchanged at A$1.13, the first time in 16 years it hasn't increased payments to shareholders. Cash earnings, which exclude one-time items, fell 16% to A$2 billion, in line with the bank's market update last week. Net income climbed 9% to A$2.57 billion on a gain from its purchase of HBOS Plc's BankWest unit, the lender said in a statement today.
"In the current uncertain economic environment we cannot guarantee to maintain future dividends at past levels," Chairman John Schubert said.
Commonwealth Bank's impairment charges on bad loans surged to A$1.6 billion in the first half, five times higher than in the year-earlier period, reflecting lending to failed companies and the creeping effects of the economic slowdown on small businesses. Shares of the bank rose 1.3% to A$29.99 after the results, much of which were flagged a week ago. The stock has dropped 40% in the past 12 months.
The bank's loan exposure included failed childcare chain ABC Learning Centres, Allco Finance and Babcock & Brown. The widening impairment charges echo statements this month from Australia & New Zealand Banking Group and National Australia Bank. An index of financial stocks on the ASX has tumbled 41% in the past 12 months.
First-half operating income rose 15% to A$8 billion, led by a 20% jump in retail banking. Income from wealth management dropped 17%.
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