Australian bank CBA posts record net


CBA sees more uncertain times ahead because of volatility in global share markets.

SYDNEY, Australia (CNN) -- Australia's second largest bank, Commonwealth Bank of Australia (CBA), has posted a record net profit of Aust. $2.655 billion ($1.45 billion), but sees more uncertain times ahead.

CBA chief executive David Murray said the result was achieved despite the volatility in global equity markets, and higher credit losses in the first half of the year.

The profit figure for the year to June 30 was up 11 percent on the previous year, and reflected in part the strong growth in the bank's fund management business.

But poor returns from equity markets had an impact on its life insurance business.

The CBA ranks No. 2 behind the National Australia Bank in lending and market capitalization, but has a bigger branch network.

More restructuring


CBA chief executive David Murray says a restructuring will see about 1000 jobs go over the next year

It has flagged more restructuring this year, which it says will lead to the loss of about 1000 jobs. The bank has 38,000 staff and claims to provide financial services to more Australians than any other financial institution.

Murray said the bank was operating in an environment characterized by increasing concern about share market volatility, particularly in the United States.

He also warned that lending growth for housing in Australia was expected to slow. While business investment was showing signs of improvement, he said the overall level of growth "may be slower over coming years."

Murray said that in these economic conditions, the bank expected to achieve "satisfactory" earnings growth over the next year.

CBA is the first of the big four Australian banks to report its full-year earnings for 2001-02. The others, NAB, ANZ and Westpac, work to a September 30 year rather than June 30, and so will release earnings in November.

CBA shares closed 1 percent higher Wednesday at A$32.01. The broader market, measured by the S&P/ASX200, eased 0.39 percent to 3164.3.