- The Commonwealth Bank has posted a $4.87 billion first half profit on the back of “a marked turnaround in economic condition”, CEO Matt Comyn announced on Wednesday.
- One of its biggest areas of growth was trading platform CommSec which welcomed 230,000 new users in the last six months on the back of a trading boom.
- Meanwhile, new home lending jumped by a third, as loan deferrals continue to fall.
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The Commonwealth Bank is boasting healthy growth as it eyes the end of the pandemic, but it is the bank’s investment platform that appears to have exploded.
CommSec, the bank’s brokerage service, added more than 230,000 new users in the last six months alone as Australia experiences its own share of market mania. Seven in ten of those are trading via the normal app or the micro investment app CommSec Pocket, suggesting much of the growth is being driven by a younger demographic.
The new influx of traders, combined with a prolonged bull market, has sent trading volumes soaring, with $110 billion moved between July and December, or double last year’s figure.
It comes on the back of fairly strong results for CBA. As Australia’s largest retail bank and therefore as one of its most important financial barometers, it reflects Australia’s burgeoning economic recovery.
“The last six months have been very challenging for many Australians. We’re starting to see a marked turnaround in economic conditions which is of course very good news looking forward. That’s primarily been on the back of very effective management of the pandemic, and a variety of both government and business support measures that have been in place,” CEO Matt Comyn said.
The improved economic outlook has helped slash loan deferrals, which are down by more than 80% from their peak. CBA is now holding 25,000 deferred home loans, down from 157,000, and 2,000 business deferrals, down from 83,000.
Meanwhile, credit cards have gone through the wringer. With Australians cutting up their cards at the beginning of the pandemic, approvals fell sharply in the September quarter of this year by around 37%. They rebounded in the last three months of the year, jumping to 80% of 2019 levels.
Overall, it delivered a $4.87 billion first-half profit, up 20% on the same half last year. As a result, CBA announced a bumper $1.50 fully franked dividend, higher than what had been anticipated by analysts.
It’s expected the strong result will see CBA’s share price rally on Wednesday, helping drive the Australian market higher.