Thursday, August 11, 2016

ACTU: CBA receives $4.4 billion profit from mum and dad mortgage holders

10 August 2016

The Commonwealth Bank of Australia (CBA) has today announced a record $9.45 billion full year profit, including a $4.4 billion profit from retail customers, in the same week that it refused to pass on the full interest rate cut to these same clients.

CBA’s profits from retail customers, mainly mum and dad mortgage holders, jumped to $4.4 billion from $3.9 billion last year, up 11%, but at the same time the bank passed on only 13 of the RBA’s 25 basis point cut just last week.

The following quotes are attributable to ACTU Secretary Dave Oliver:

  • 'The 11% rise in retail banking profits is staggering when you compare it to Australian wage growth, which was at 2.1% for the year to March 2016. This growth in retail banking profits also outstripped even the growth in average house prices, which was 6.8% for the year to March.
  • 'Working people put their trust in institutions like the Commonwealth Bank and are right to be angry when they see record profits of almost $10 billion one week while just days earlier the bank refused to pass on a full interest rate cut.
  • 'For a family with a $300,000, 25-year mortgage, the refusal to pass on the entire RBA rate cut will cost ordinary mums and dads around $21 per month, while for families managing a mortgage of $613,900, the nation’s median house price, it would be $43 a month.
  • 'Added to customers frustration must be the 3.5% lift in fees and charges the bank accrued, with households paying more than $4.1 billion in bank fees for the year.
  • 'CBA’s colossal profit shows that the economy, and especially the financial system, only favours the wealthy and powerful.
  • 'Australian banks are among the biggest and richest in the world. The fact that that the big four banks last week all refused to pass on the full rate cut to their retail customers is evidence of an oligopoly that needs to be broken.
  • 'Prime Minister Malcolm Turnbull is beholden to the banks. He chose to hold a committee meeting for banks rather than a Royal Commission. It’s time he stood up for working people and helped them prosper.'

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