SYDNEY: Australia's biggest bank, the Commonwealth, on Wednesday reported a five percent rise in full-year net profit to a record Aus$9.063 billion (US$6.62 billion), although results slowed in the second-half.
The nation's largest company by market capitalisation said net profit for the year to June 30 rose from Aus$8.63 billion the previous 12 months, broadly matching expectations.
Cash profit, the bank's preferred measure of earnings that strips out one-off costs, increased by five percent to Aus$9.137 billion.
Shares in the financial institution went into a trading halt as it announced a Aus$5 billion capital-raising to meet tougher regulatory requirements, which follows similar moves by the National Australia Bank and ANZ.
"Maintaining a flexible and strong balance sheet, including a strong capital position, continues to be a strategic focus for the group," chief executive Ian Narev said in a statement.
"We now have greater certainty regarding the key requirements of global relativity and mortgage risk weights.
"Our announcement today strengthens our position in response to those requirements," Narev added of the capital raising.
Commonwealth Bank's capital-raising is the second-largest in Australia's history after NAB's Aus$5.5 billion announcement in May. ANZ announced a Aus$3 billion rights issue last week.
The moves followed new rules released by financial regulator, the Australian Prudential Regulation Authority, for the biggest banks to hold more reserves as a buffer against mortgages -- part of a global effort after the 2008 financial crisis.
Narev said the bank, the country's largest lender, had a long-term "positive view" of the Australian economy.
But he cautioned about risks in the short-term from global economic volatility.
"The Australian economy has some good foundations," Narev said of the outlook for the next year, noting that the central Reserve Bank of Australia's decision to slash interest rates to a record-low of 2.0 percent was stimulating residential construction.
"Household credit quality remains high, though the banking sector and our regulators are conscious of the potential impacts of a sustained period of low interest rates, and are therefore taking measured action."
The bank declared a final dividend of Aus$2.22 per share, a lift of 1.8 percent.
Analysts said the result was broadly in line with expectations and welcomed the capital raising which they said propelled CBA once again into the top spot for its capital ratio.
But Omkar Joshi, investment analyst at Watermark Funds Management in Sydney, said CBA revenue grew by only one percent in the second half while expenses grew three percent.
"The focus now is on the outlook for margins and bad debts from here," said.
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