CBA posts record profit as borrowers feel the pinch
The strong results mean the bank is well placed to manage economic headwinds, CEO Matt Comyn said
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The Commonwealth Bank has credited its continued focus on supporting customers and investing communities for its record $10.2 billion profit.
Releasing the full financial year 2023 results this morning, the six percent increase in cash net profit after tax comes in the midst of rising inflation, higher interest rates and a cost of living crisis.
The CBA said in a statement that it had funded $149 billion of new lending as Australia’s largest home lender, helping 150,000 Australians to buy a home. It also noted that CBA has provided Australian businesses with $35 billion of new lending, with one in four small and medium size businesses now CBA customers.
It’s good news for shareholders, with return on equity up 14 percent resulting in a dividend per share of $4.50.
Acknowledging that some borrowers were facing financial challenges following a 4 percent interest rate rise in just over a year and increasing cost of living pressures, Commonwealth Bank CEO Matt Comyn said the results demonstrated a resilient banking system and provided stability for the wider Australian economy.
“It has been an increasingly challenging period for our customers, dealing with rising cost of living pressures,” said Mr Comyn. “Our balance sheet resilience allows us to support our customers and deliver sustainable returns for shareholders.”
He said the CBA would continue to monitor the impact of a slowing economy and reduced discretionary spend, particularly on small business.
“The Australian economy has been resilient with the tailwinds of a recovery in population growth, relatively high commodity prices and low unemployment,” Mr Comyn said. “However, there are signs of downside risks building as rising interest rates have a lagged impact on mortgage customers and other cost of living pressure become a financial strain for more Australians.
“The Australian banking system remains strong and has navigated rapidly changing and uncertain global financial conditions through sound liquidity risk management and strong capital regulation.”
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Governments around the world are offering incentives to reverse a downward spiral that could threaten economic growth
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The Australian birth rate is at a record low, new data has shown.
Figures from the Australian Bureau of Statistics have revealed there were 286,998 births registered around the country last year, or 1.5 babies per woman.
Birth rates in Australia have been in a slow decline since the 1990s, down from 1.86 births per woman in 1993. Declining fertility rates among girls and women aged 15 to 19 years was most stark, down two thirds, while for women aged 40 to 44 years, the rate had almost doubled.
“The long-term decline in fertility of younger mums as well as the continued increase in fertility of older mums reflects a shift towards later childbearing,” said Beidar Cho, ABS head of demography statistics. “Together, this has resulted in a rise in median age of mothers to 31.9 years, and a fall in Australia’s total fertility rate.”
The fall in the Australian birth rate is in keeping with worldwide trends, with the United States also seeing fertility rates hit a 32-year low. The Lancet reported earlier this year that, based on current trends, by 2100 more than 97 percent of the world’s countries and territories “will have fertility rates below what is necessary to sustain population size over time”.
On a global scale, the Lancet reported that the total fertility rate had “more than halved over the past 70 years” from about five children per female in the 1950s to 2.2 children in 2021. In countries such as South Korea and Serbia, the rate is already less than 1.1 child for each female.
Governments around the world have tried to incentivise would-be parents, offering money, increased access to childcare and better paid maternity leave.
Experts have said without additional immigration, lower birth rates and an ageing population in Australia could put further pressure on young people, threaten economic growth and create economic uncertainty. However, a study released earlier this year by the University of Canberra showed the cost of raising a child to adulthood was between $474,000 and $1,097,000.
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