Commonwealth Bank profits jump, Shares up again: Economy Roundup

The Commonwealth Bank of Australia has recorded a 30% increase in earnings for the March quarter, saying its financial results are strong amidst troubling economic conditions.

CBA said earnings for the three months to March 31 were around $1.5 billion, with chief executive Ralph Norris saying in a statement that bad debt charges were lower than analysts had expected.
“While we have clearly passed the peak in the bad debt cycle, key credit quality indicators remain at elevated levels and we continue to expect gradual, rather than dramatic improvement,” Norris said.

The bank said bad-debt charges fell to $500 million, and also said it had experienced solid volume growth in key markets, especially in deposits.

Additionally, CBA said that volatility is still present in some other parts of the bank’s net interest margin, even though customer margins remain stable. Retail banking remained stable, it said.

Transurban Group has now rejected new offers from two Canadian pension plans, saying they are lacking in value, after the two funds improved their takeover offers for the company.

The two funds originally put forward a bid of $5.57 per share, representing a 13% premium, but was contingent on the toll road operator scrapping a proposed capital raising.

However, the company has said it received a secondary bid this morning offering $5.42 per security, and would also allow a capital raising to proceed. However, Transurban said this was unacceptable.

“Not withstanding this rejection of the bidding group’s proposals, Transurban remains willing to explore opportunities for constructive and harmonious relationships with the members of the bidding group into the future that will serve the interests of all Transurban security holders,” the company said

Shares higher again

The Australian sharemarket has opened higher once again today, with investors still gaining more confidence on the back of a massive bailout bill for Greece.

The benchmark S&P/ASX200 index was up 46 points or 1.01% to 4594.1 at 11.50 AEST, while the Australian dollar actually lost some ground to US89c.

ANZ shares rose 2.3% to $23.04, while Commonwealth Bank shares also increased by 0.3% to $55.04. NAB shares gained 1.5% to $25.65, as Westpac also rose 1.5% to $25.19.