CommBank’s record $10b profit could’ve been bigger: CEO
Adrian Black and Kaaren Morrissey |
Australia’s biggest bank is positioning for stronger growth in the next decade, betting big on artificial intelligence to protect customers from scams and streamline operations.
The Commonwealth Bank posted a record profit of $10.1 billion in the year to June 30, but chief executive Matt Comyn said the result could have been even better.
“There’s a number of things that we could have done differently if we wanted to deliver a stronger result,” he told shareholders at a results briefing on Wednesday.
“We’ve been able to leverage the capability of (generative) AI … we wanted to increase the pace of that so we put some additional investment across that.”
While Mr Comyn focused on the future, investors might be more concerned with the heavyweight stock’s current valuation.
Shares in the bank, the most valuable company on the ASX, dropped more than four per cent to below $170 for the first time since May on the profit announcement.
AI was being used in its code reviews, in chatbots on its mobile app and to alert customers to suspicious transactions and scams.
The technology has helped the bank send 10 times more alerts warning customers through its banking app.
A reported $880 million in scam payments have been prevented, while the company is also using AI to confront grifters on voice calls and WhatsApp chats.
The technology investment into fighting fraud and scam activity chalked up $900 million of its $12.9 billion in operating costs.
“It’s also just really important to be used defensively from a threat perspective,” Mr Comyn said, noting the rising speed and sophistication of cyber attacks.
The bank also announced it would become AI pioneer OpenAI’s strategic banking partner in Australia.
The deal will give Commonwealth Bank workers access to OpenAI’s advanced AI tools and training and follows similar partnerships with Morgan Stanley, Bank of New York and UK-based NatWest Group in recent months.
Mr Comyn was careful about discussing “cost opportunities” when it came to the technology’s impact on employment, instead highlighting the opportunity for employees to use AI tools to do a better and more effective job.
“On the longer term, yes, you can imagine that there are some much more efficient ways of delivering some of the things that we currently do,” he told investors.
The Finance Sector Union called the bank’s profit result “obscene” and national secretary Julia Angrisano lambasted its efforts to automate and offshore its workforce.
“This is not innovation, it’s cost-cutting at the expense of workers, customers and communities,” she said.
The union has filed a Fair Work Commission dispute on the bank’s decision to cut 283 local technology workers while advertising jobs with the same titles in India.
The bank’s $10.3 billion underlying cash profit was up four per cent on the previous financial year.
The bottom-line result was broadly in line with expectations at $10.1 billion, reflecting an eight per cent improvement.
The boosted profit was driven by loan-volume growth and a stable underlying net interest margin, a measure of how much money banks make on their lending activities.
The company will pay a $2.60 final dividend, taking its total payout for the year to $4.85 per share, up four per cent from a year ago.
Meanwhile, the bank’s climate plan will rule out new thermal coal mine investment ahead of zero exposure to existing thermal coal projects by 2030.
It has also introduced tougher requirements for metallurgical coal project lending.
The move was another nail in the coffin for coal, Market Forces policy analyst Morgan Pickett said.
“Westpac, ANZ, NAB and Macquarie cannot keep their heads in the sand,” he said.
“CommBank has proven that ending support for companies making climate change worse is not only possible, but essential for good business.”
AAP
