In a statement to the ASX yesterday, CBA said while the outcomes of the licensee conditions for Commonwealth Financial Planning and Financial Wisdom and the Open Advice Review program are uncertain, it does not believe the overall costs will impact group results in the future.
The results for the 12-month period showed a 13 per cent increase in funds under management to $253 million from the previous financial year, despite a $5.1 billion net outflow from emerging market funds.
Australian retail funds under administration reached record levels, exceeding $100 billion at 30 June 2014.
CBA said both Colonial First State FirstChoice and Custom Solutions performed well, obtaining $4.1 billion in net inflows during the year.
The bank said the 25 per cent growth in funds under administration for Custom Solutions “reflected the success from partnering with advisers and clients”.
Insurance income for the year was also up, increasing six per cent to $575 million.
CBA chief executive Ian Narev said despite the benign credit environment and macro-economic outlook the group “remains cautious, maintaining a strong balance sheet with high levels of capital and provisioning”.
Credit Swiss said in its analysis of CBA’s results that while the result was better quality than expected, it is difficult to see how the bank can maintain its stock’s premium share rating.
Credit Swiss explained that although the bank had a stable net interest margin and flat costs in the second half, it was concerned about the bank’s soft operating income and declining collective provision coverage of risk-weighted assets.
