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Commonwealth Bank’s cash profit plunges 11 per cent during COVID-19

The Commonwealth Bank's cash net profit after tax has fallen more than 11 per cent year on year as the bank reels from loan impairments caused by COVID-19.

Announcing its full year results today, CBA said cash NPAT was down 11.3 per cent to $7.3 billion in FY20 due to conditions created by the virus.

While the bank's cash NPAT was down year on year, it's statutory net profit rose 12.4 per cent to $9.6 billion.

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"Our financial results for the 2020 financial year reflect the impact of COVID-19 on our customers and the economy, however, business performance remained strong due to disciplined execution of our strategy, and we continued to strengthen our balance sheet," the bank told shareholders.

Approximately 135,000 CBA customers deferred their home loan repayments as part of the bank's financial assistance program, accounting for about 8 per cent of all accounts with the bank.

CEO Matt Comyn said the bank saw an 800 per cent increase in calls to its financial assistance line during the pandemic, with more than 10.2 million customers logging in to digital services daily.

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"We are now contacting all customers with deferred loans to talk with them about their options, including returning to full or part payment, or converting their loans to interest only," Mr Comyn said.

"Our focus will continue to be on supporting our customers through difficult times."

The bank declared a final divided of 98 cents per share, fully franked. This year's final dividend is down 57 per cent from the past two years, where the bank paid $2.31 per share.

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All eyes now turn to the performances of the remaining "Big Four" banks.

ANZ is due to post its final results on October 29, Westpac on November 2 and NAB on November 5.

Some clues of the global conditions facing major banks can be found from the UK, where the five largest banks reported a sizable increase in expected credit losses.

Barclays plc, HSBC Holdings, Lloyds Banking Group, NatWest Group and Santander Holdings reported expected credit losses of $AUD 16.66 billion in just the first quarter of FY20.

When forecast for the entire financial year, Fitch ratings believes that figure could blow out to an eye-watering $AUD 51.27 billion.

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Source: 9News https://www.9news.com.au/national/commonwealth-bank-results-cash-net-profit-down-11-per-cent-as-home-loans-stall/402ae78b-6684-451c-b553-e4d1663c054e

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