Half-year profit drops to AU$4.9b for Commonwealth Bank

The Commonwealth Bank of Australia (CBA) has reported its financial results for the first half of the year, recording AU$4.9billion in statutory net profit after tax.

The result is a 20.8% drop year-on-year compared to last year, when the bank reported AU$6 billion in after-tax profit, thanks in part to the one-off gain related to the sale of its CFS Global Asset Management business.

Overall, operating income was reported as AU$11.9 billion, down 0.5%, and operating expenses were AU$5.6 billion, up 2.3%.

For the six months to 31 December 2020, the bank's business lending segment grew by AU$4 billion. CBA provided highlights in its results presentation as to how it was building Australia's "leading business bank", which included the "simplification of credit processes and technology", being number one in payments processed via Australia's not-so-new New Payments Network, and introducing live web messaging and real-time smart alerts.

Continuing with CEO Matt Comyn's push for CBA to provide the "best digital experience in Australia, bar none", the bank's results highlighted a number of tech wins during the six-month period, including boasting 7.5 million digitally active customers. The bank peaked at more than 10 million daily logins into its Commbank app during 2020.

"We're continuing to see a very strong preference for customers to engage with us using our digital and the latest technology, and we want to make sure we're continuing to invest and deliver the best digital experience in our customers' lives," Comyn said on Wednesday.

AU$856 million was invested into tech in the first half of the 2021 financial year.

"I think [technology has] very much been part of the Commonwealth Bank's success for the last 20 years, but I think it's very important we continue to innovate and to invest, that starts, particularly at the moment, with the best in market digital experience," the CEO said during a press call.

"Our aspiration has to be to have the best possible digital experience for our customers across their broader lives so that we can really be at the centre of their relationships."

He pointed to the bank's Customer Engagement Engine, which is running about 400 machine learning models and ingesting about 157 billion data points in real time. Comyn said that enables CBA to make around 35 million decisions each day.

Looking forward, Comyn said the bank is going to invest in "a number of capabilities" to ensure it can continue to innovate but also to increase the velocity of change inside the organisation. During the reported period, the bank boasted a workforce comprising around 5,000 engineers, revealing plans to hire more. CBA also touted a "continued migration to public cloud".

"Some of that is about reconfiguring and decoupling some of the systems into microservices, some elements of that are about moving those services onto the cloud -- of course that starts with having best in class engineering capabilities," he said.

"We already have a very large IT engineering team, but we're certainly looking to continue to expand and making sure that we're attracting the best talent in market."

After holding a press conference last month to celebrate the one-year anniversary of the launch of its venture arm, X15 Ventures, the bank's results summarised the achievements, saying it was building a "pipeline of new digital businesses".

Comyn on Wednesday said he anticipates integrating some of those external services into a "richer and more differentiated banking proposition" for customers.

Updated at 11:40am AEST, 10 February 2021: Added comments from CEO Matt Comyn's press call

MORE FROM THE YELLOW BANK

• Commonwealth Bank's refreshed digital strategy to focus on the power of AI
• Best digital experience in Australia, bar none: Commonwealth Bank CEO's promise
• Commonwealth Bank sees boost during COVID-19 with annual profit hitting AU$9.6b
• How CommBank is training its machine learning Customer Engagement Engine
• Commonwealth Bank focused on innovating amid pressure from fintechs
• Commonwealth Bank to spend over AU$5b on tech in the next five years