Commonwealth Bank (ASX:CBA) increased its net profit 13% in FY11 to $6.39 billion, in a result attributed to a strong performance in Australia and improved margins in New Zealand.
The company reported a 19.5% cash return on equity for the year, up 80 basis points. Net interest margin meanwhile improved to 2.19%.
CEO Ralph Norris said the company's business in Australia had “performed well during a period characterised by subdued credit growth and intense competition.”
Margins meanwhile improved at the company's New Zealand operations - including ASB Bank - resulting in a 20% increase in operating performance in New Zealand dollars.
CBA declared a final dividend for the year of $1.88 per share, up 11% of FY10. This takes the total dividend for the year to $3.20, a cash payout ratio of 73.2%.
But Norris cautioned that FY12 could be another challenging year for the Australian financial sector.
“The 2011 financial year has been characterised by subdued system credit growth and intense competition,” he said. “At this stage there is nothing to suggest that the 2012 financial year will see any material improvement on this front.”
Because of the uncertain economic outlook, CBA said it had decided to retain high levels of liquidity - $101 billion as of the end of FY11. The company is also exploring investment opportunities in Asia.
CBA shares grew 2.01% on Wednesday to $48.230.
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