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Investing.com-- Commonwealth Bank Of Australia (ASX:CBA), the country’s biggest lender, clocked record-high annual earnings on Wednesday as it benefited from strong lending growth amid falling interest rates.
The bank also declared a record annual dividend.
CBA’s cash profit for the year to June 30 rose 4% to A$10.25 billion ($6.69 billion), just in line with Bloomberg estimates of A$10.26 billion. But the profit was the highest ever recorded by the bank.
This came on the back of net interest income of $11.47 billion, up 3% from a year ago, while CBA’s net interest margin also improved by 9 basis points.
The bank declared a final dividend of A$2.60 per share, bringing its annual dividend to A$4.85, its highest ever.
CBA’s cash earnings were boosted by strong growth in its core lending unit, while interest rate cuts by the Reserve Bank of Australia this year also supported lending activity.
The RBA cut interest rates by 25 basis points on Tuesday, bringing its total annual cuts to 75 bps. The central bank also forecast slower economic growth for the year, a trend that could herald slower lending activity in the coming year.
Still, Australian consumer spending and household finances remain strong, underpinned chiefly by a strong labor market.