Commonwealth Bank of Australia reported a year-over-year decrease in cash net profit for the six-month period ended Dec. 31, 2017.
The bank's cash net profit after tax from continuing operations for the fiscal first half dropped to A$4.74 billion, or A$2.722 per basic share, from A$4.83 billion, or A$2.811 per basic share, in the year-ago period. Including discontinued operations, cash net profit after tax declined to A$4.87 billion, or A$2.800 per basic share, from A$4.91 billion, or A$2.857 per basic share.
On a statutory basis, net profit after tax from continuing operations increased to A$4.90 billion from A$4.84 billion, while EPS fell to A$2.816 from A$2.817. Including discontinued operations, statutory net profit after tax rose to A$4.91 billion from A$4.90 billion, while EPS decreased to A$2.822 from A$2.852.
Continuing operations comprise CBA's life insurance businesses in Australia and New Zealand, which will be sold to Hong Kong-based AIA Group Ltd. in 2018.
The fiscal first-half S&P Capital IQ consensus estimate for the lender's normalized EPS was A$2.92.
CBA made a provision of A$375 million in relation to the potential penalties from the legal proceedings brought by the Australian Transaction Reports and Analysis Centre over the bank's 53,800 alleged breaches of anti-money laundering and counterterrorism financing laws. The bank also made a A$200 million expense provision for expected regulatory, compliance and remediation costs, including the country's Financial Services Royal Commission.
Net interest income from continuing operations grew year over year to A$9.25 billion from A$8.71 billion, while net interest margin increased by 6 basis points year over year to 2.16%.
Total operating income edged up to A$13.13 billion from A$12.83 billion, while operating expenses went up to A$5.76 billion from A$5.47 billion.
CBA saw loan impairment expenses decline to A$596 million from A$599 million.
As of Dec. 31, 2017, the bank's common equity Tier 1 capital ratio for continuing operations under international Basel III standards rose by 90 basis points year over year to 16.3%. Under the Australian Prudential Regulation Authority's standards, the common equity Tier 1 ratio for continuing operations ticked up year over year by 50 basis points to 10.4%.
The group declared an interim dividend of A$2.00 per share, up from A$1.99 per share a year earlier.
