The survey came as the Commonwealth Bank reported a half-year cash profit of $3.576 billion, up 7 per cent from the year before. The result gives the Commonwealth a return on equity of 19.2 per cent - way above the 15 per cent typical of other Australian banks and the 5 per cent typical of banks overseas.
Treasurer Wayne Swan told parliament the Commonwealth had made the money “despite global volatility in global financial markets”.
“It shows they are hugely profitable,” he said.
“My belief and the belief of the government is that the banking system should work for all Australians, for every customer, for every worker, for the shareholders, for the broader community and the whole economy,” he said referring to the Commonwealth’s decision on Monday to lift its standard variable mortgage rate 0.10 points to 7.41 per cent, giving it the second-highest rate behind Westpac’s 7.46 per cent.
The decision will help restore a 0.10 point dipin the bank’s net interest margin from 2.31 per cent to 2.21 per cent.
Commonwealth Bank chief executive Ian Narev told a Sydney media conference that before the bank lifted rates Monday “writing a new home loan was not profitable”.
“I expect and welcome scrutiny,’’ the newly-appointed chief executive said... ‘‘What is critical in our mind is that that scrutiny is had on the facts and not against abstract concepts. Some of the sides, in particular the shareholders and deposit-holders, their voices have been lost a bit in the debate.’’
The Commonwealth’s 19.2 per cent return on equity saying profitability was “appropriate for an institution of this size at this time”.
Internationally a 5 per cent return on equity is more common, although Canadian banks average 15 per cent.
Mr Narev sought to distance the Commonwealth from the other major banks saying he had no plans for redundancies and no plans to move workers offshore.
“We don't have a different view from any of our competitors on the need to be as productive as we can be, we do have a different view on how to achieve that productivity in a sustainable way,” he said.
The ANZ has announced plans to cut 1000 jobs and Westpac 400.
The consumer confidence survey shows 54 per cent of Australian families believe now is a good time to buy a major household item, more than double the 26 per cent who thought the time was bad.
The results reflect the high Australian dollar and also the two successive Reserve Bank rate cuts in November and December.
The Bank’s unexpected decision not to cut rates this month appears to have dimmed confidence with those responses collected after the Tuesday announcement some 4 per cent less positive than those collected before.
Confidence among mortgagee holders is 7 per cent lower than among households who rent.
The overall confidence index jumped 4 per cent to 101.1, a level where optimists just outnumber pessimists.
In today's Canberra Times, Sydney Morning Herald and Age
. December: Bleak Christmas? Europe is scaring us
. September: We've pulled back! We're now merely unconfident
. August: Consumer confidence by voting intention - I've made a graph