Australia's Commonwealth Bank Posts Record Profits

Australia's biggest lender Commonwealth Bank sounded a cautious note about the country's economic outlook Wednesday even as it posted a record Aus$9.23 billion (US$7.08 billion) in annual profit. 
The Commonwealth Bank's performance is closely watched for guidance on the health of the Australian economy in the current low interest-rate environment. 
CBA chief executive Ian Narev said the company remained positive about Australia's economic prospects but warned that the nation's nominal growth, which is not adjusted for inflation, needed to strengthen. 
Reflecting softness on the income side of the economy, Australia's nominal GDP grew by 0.5% in January-March for an annual reading of 2.1%. It was far below real GDP of 1.1% in the quarter for a year-on-year figure of 3.1%. 
Cash profit, the bank's preferred measure of earnings that strips out one-off costs, rose 3% to Aus$9.45 billion for the year to June 30 compared to the previous 12 months, broadly matching analyst expectations. 
Net profit was up 2% at Aus$9.23 billion while cash earnings for the six months to June 30 slipped 3% compared to the July-December period. 
Earnings from its retail banking division -- the largest in the bank -- rose 11% to Aus$4.44 billion, while business and private banking grew by 5% for the period. 
But CBA's bad debts jumped 27%, weighing on profits, on higher provisions for resource, commodity and dairy exposures. 
The bank announced a final dividend of Aus$2.22 per share, leaving the final payout to shareholders at Aus$4.20, which was unchanged from the previous year.