Business

Commonwealth Bank reports record annual profit

Commonwealth Bank ATMs
Image caption Commonwealth Bank saw profits rise substantially in its retail banking division

Commonwealth Bank, Australia's biggest lender, has posted the highest ever profit for an Australian bank.

It made a net profit of A$7.7bn ($7bn; £4.5bn) for the year to 30 June, up 8% from the previous year.

The bank has been boosted by growing deposits and a higher margin between the rate of interest earned on loans and the rate paid out to savers.

Despite the record performance, the firm's chief executive, Ian Narev, said business conditions remained "mixed".

Mr Narev said the bank was keeping a close eye on the confidence level of Australian business and households as well as the impact of economic conditions in China on the demand and price for resources.

He added that the value of the Australian dollar and the resulting impact on export-sensitive parts of the Australian economy and the stability of funding markets, were the other areas the bank was keeping a eye on.

"Indicators relating to all of these factors have been mixed over the past six months, and we expect that to remain the case in the near term," he said in the annual results statement.

"So overall, we believe that the underlying conditions for our business in the 2014 financial year will be similar to those we have experienced in the recently completed year."

The bank's shares opened higher on Wednesday on the Australian Securities Exchange, but then fell nearly 1% as investors looked to gain profits.

Commonwealth Bank shares have risen nearly 35% over the past year.

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