CBA (NZ) profit rises 76.3 per cent

Press, 4 December 1981, Page 10

CBA (NZ) profit rises 76.3 per cent

The Commercial Bank of Australia, Ltd, increased net operating profit on its New Zealand operations to $4,349,000 (1979-80 $2,467,000) in the year ended June 30. This was despite the constraining nature of a highly competitive market, the bank’s manager for New Zealand (Mr W. J. Gough) said. With the addition of extraordinary items amounting to $4,001,000 (1979-80 $103,000), net profit increased to $8,350,000 (1979-80 $2,570,000). The bulk of the increase in extraordinary items for the year was because of the sale of CBA's interest in Marac. Mr Gough attributed the rise in earnings to improved operating efficiencies and above-plan performance in the international area. During 1980-81 the CBA increased its market share significantly in the current account area. This was achieved despite a continuing

customer preference for time deposits and the increase in market share (from 7.10 per cent during June 1980 to 7.62 per cent during June 1981) has had a favourable influence on the cost of funding. Continued high demand for lending was constrained by relatively low deposit growth and liquidity considerations. Loans, advances, bills discounted and other lending engagements rose by S7IM (24 per cent) to $366M, while deposits, bills payable and all other liabilities increased by $67.5M (16.2 per cent) to reach $483.7M at the year’s end. Interest rates during the year under review continued at historically high levels, although in response to a slight drop in some deposit rates during the June quarter, the bank was able to reduce lending rates on selected types of facilities. Looking to the future, the bank expects a substantial

increase in the demand for finance, primarily because of the impending commencement of energy-related projects but also a generally higher level of economic activity. There are exciting opportunities in both the domestic and international banking areas in respect of these projects. Mr Gough also released details of performance during 1980-81 of the Commercial Bank Savings Bank (N.Z.), Ltd, when net profit after tax increased by $107,000 (20.7 per cent) to $623,000. Deposits grew by 12.8 per cent to $75.6M during the year, and mortgages and other loans increased by 17.4 per cent to $37.6M. As separately announced, the CBA Group reported a global net operating profit for the year of $NZ61.987,000, an increase of 20.4 per cent over 1979-80. After extraordinary items the net profit was $NZ118.869.000.