CBA delivers a flat first-half result following scandals

​CBA has delivered a $4.8 billion half-year profit and higher than ever NPS scores despite being plagued by regulatory issues

Outgoing CommBank CEO Ian Narev announces first half results to December 2017.
Outgoing CommBank CEO Ian Narev announces first half results to December 2017.

CBA has delivered a $4.8 billion half-year profit, despite the financial giant being plagued with scandals that have seen it become the subject of a royal commission, and forced to pay millions in ASIC fines and customer refunds.

CBA’s statutory profit was at $4.9 billion as at December 2017, a relatively flat 1.2 per cent increase over the half year ending December 2016. Cash profit was $4.7bn after tax, a 1.9 per cent decrease on the same period last year, and slightly less than the $5bn profit expected. This was due, in part, to the $375m set aside by the CBA to pay the civil penalty it expects to receive from Austrac due to alleged contraventions of the Anti-Money Laundering and Counter-Terrorism Financing Act.

For the first time, CBA included reporting on its Net Promoter Score (NPS), which sits at 4.4, the highest of the major banks despite the ongoing issues facing the banking giant. For CBA outgoing CEO, Ian Narev, however, this isn’t good enough.

CBA recently confirmed Matt Comyn as its new CEO, replacing Narev in April.

“We have been maintaining the focus on the long-term strategy of how the customer is feeling. On all of the key dimensions we are first or first equal on customer satisfaction measures,” Narev said. “This is the first period we’ve used the NPS, and the rationale behind this was to recognise that we did need to focus more on the root cause of customer dissatisfaction, and the NPS enables that.

“The score is the most positive of the major banks. However, 4.4 is not a good enough number and I’m sure the team will focus on driving that higher in the future. It needs to be higher, particularly in a world where people are judging their experiences by other new players in the industry." 

CBA also set aside another $200m expense provision for costs relating to the regulatory, compliance and remediation programs.

“It’s been a six months characterised by a lot of additional activity, particularly in the world of regulation and compliance, and I want to acknowledge we did bring a lot of that on ourselves. We did so by not reaching standards that others expect of us and we expect of ourselves. That caused reputational damage and there was a financial impact in this result. We are doing a lot of work to fix it,” Narev said.

Narev went on to explain customer outcomes continue to be at the core of CBA’s business in its first half and said the bank had done a lot in this period to focus on better outcomes for customers. Examples he pointed to included leading the industry in cutting ATM fees, making sure tellers are rewarded on service and less on sales, and keeping call centres onshore.

"This is not because we’re favouring customer service over productivity, it’s because we think the two things go together,” he said.

Narev also highlighted the CBA’s recent investment in research and development of technology for customer outcomes. These included the CEBA Chatbox, and the first commercialised blockchain solution in South Africa, which he said will enable the group to give customers their own digital identity for use on the blockchain so they’re in control of it.

"In coming months, the leading in-branch kiosk technology we’ve developed in South Africa will be rolled out in all of the branches and ASB,” he added.

 Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+:google.com/+CmoAu      

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Latest Videos

More Videos

looking for the best quality of SMM Panel ( Social Media Marketing Panel ) is a website where People Buy Social Media Services Such as Fa...

Kavin kyzal

How to manage social media during Covid-19

Read more

Thank you for sharing your knowledge. Definitely bookmarked for future reading! Check this website https://a2designlab.com/ with lots of ...

Pierce Fabreverg

Study: Gen Z are huge opportunity for brands

Read more

Thanks for sharing. You might want to check this website https://lagimcardgame.com/. An up and coming strategic card game wherein the cha...

Pierce Fabreverg

Board games distributor partners with Deliveroo in business strategy pivot

Read more

Such an important campaign, dyslexia certainly need more awareness. Amazing to see the work Code Read is doing. On the same note we are a...

Hugo

New campaign aims to build understanding around scope and impact of dyslexia

Read more

Great Job on this article! It demonstrates how much creativity, strategy and effort actually goes to produce such unique logo and brandin...

Pierce Fabreverg

Does your brand need a personality review? - Brand vision - CMO Australia

Read more

Blog Posts

A few behavioural economics lesson to get your brand on top of the travel list

Understanding the core principles of Behavioural Economics will give players in the travel industry a major competitive advantage when restrictions lift and travellers begin to book again. And there are a few insights in here for the rest of the marketing community, too.

Dan Monheit

Co-founder, Hardhat

Predicting the Future: Marketing science or marketing myth?

Unicorns, the Sunken City of Atlantis, Zeus: They are very famous. So famous in fact, that we often think twice about whether they are real or not. Sometimes if we talk about something widely enough, and for long enough, even the strangest fiction can seem like fact. But ultimately it is still fiction - stories we make up and tell ourselves over and over until we believe.

Kathy Benson

Chief client officer, Ipsos

Winning means losing in the game of customer retention

At a time of uncertainty and economic hardship, customer retention takes on much greater importance. CX Lavender’s Linda O’Grady examines the big grey area between ‘all’ and ‘best’ customers when deciding who is worth fighting for and how.

Linda O'Grady

Data Strategy Partner & Business Partner, CX Lavender

Sign in