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Commonwealth bank reports cash profit of $4.68 billion, missing expectations

Just days after being called out in the banking royal commission final report, one of Australia’s ‘big four’ banks, Commonwealth bank has reported its half year results

Commonwealth bank’s H1 cash profit was recorded at $4.68 billion, up 1.7% from the previous year. However, one of Australia's biggest banks has missed analysts' expectations despite the increase.

Analysts say higher funding costs and regulatory pressure played a part.

The bank reported its H1 operating income was $12.408 million, down 1.9%, due to volume growth offset by lower net interest margin, lower markets and fee income, and the impact of weather events.

The bank recorded its statutory net profit after tax (NPAT) was at $4.599 million.

While its net interest margin of 2.10%, was down 4 basis points from 2H18, due to higher funding costs and home loan switching and competition.

CBA’s interim dividend per share reported flat at $2.00, while the bank says their dividend reinvestment plan is anticipated to be satisfied in full by an on-market purchase of shares.

The bank reported its earnings per share (cash basic) increased 0.9% to 265.2 cents.

Next steps after the royal commission

CBA has said on Wednesday it will work with regulators and the government to implement inquiry recommendations.

CBA has said the bank is "Working through the royal commission's final report and 76 recommendations"

It says it is implementing stronger policies and processes, including a new code of conduct.

Commonwealth Share price

Monday’s royal banking commission saw stocks of Commonwealth bank of Australia surge, but on Wednesday morning the surge ended, with the financial sector trading in the red on Wednesday morning.

Shares of Commonwealth Bank of Australia fell as much as 2.2 % to A$72.02 at time of writing.

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