Commonwealth Bank sees boost during COVID-19 with annual profit hitting AU$9.6b

CEO Matt Comyn said technology, specifically digital banking, played an 'enormous' role in increasing the bank's profit by 12.4%.

The Commonwealth Bank of Australia (CBA) has reported a 12.4% increase in profit for FY20, with the yellow bank posting AU$9.6 billion in statutory after-tax profit despite taking a hit from COVID-19.

"Overall, we're lucky that we came into this period in a very strong position so the bank's been able to operate very effectively during that time, but of course we have been impacted," CEO Matt Comyn said while delivering the bank's results.

Comyn said CBA's focus on technology helped.

"Technology, and specifically digital banking, has played an enormous role in the way we've served our customers, particularly over the last six months," he told shareholders.

"We've been able to leverage again the power of digital banking to reach as many of our customers as possible, to keep them updated and informed about what's been going on with the coronavirus."

During the pandemic, the bank managed over 1 million requests for help via its digital channels.

Operating income for CBA was AU$23.7 billion and operating expenses were just shy of AU$11 billion, driven mostly by higher staff and IT costs. The bank said IT expenses increased due to higher infrastructure costs and higher investment spend on risk and compliance.

The bank said it "quickly scaled" to allow 39,000 of its staff and contractors to work remotely.

Following Comyn last month sharing his vision for the yellow bank, one that provides the best digital experience in Australia "bar none", CBA told shareholders much the same, that it was focusing on six areas to provide the best experience possible to customers.

The first, "deep personalisation", sees CBA tailor in-app experiences for customers, powered by its Customer Engagement Engine and using data to "enhance financial wellbeing". The second is focused on partnering to deliver "integrated digital experiences", with another seeing the bank partner with global "leaders".

"Digitising end-to-end" will see the bank transition more functions to a digital method, "intelligent protection" is aiming to provide a 100% security guarantee, and under "resilient, modern platforms", CBA is looking to have over 95% of its apps in the cloud over the next five to seven years.

CBA said it is still delivering on the 176 milestones of the Australian Prudential Regulation Authority's (APRA) Remedial Action Plan, saying previously it was looking at how it could use data "the right way" to restore customer trust.

It's also still working on addressing issues that came out of the Banking Royal Commission, and is continuing to strengthen its capabilities to address financial crime, it said.

CBA's New Zealand arm, ASB, reported a 20% decrease of its cash net profit, coming in at NZ$967 million.

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