CBA: 2011 outlook somewhat uncertain, global regulations to increase costs
In his first statement as Commonwealth Bank of Australia Ltd chairman (ASX:CBA), David Turner has described the 2011 outlook as "somewhat uncertain" and warned that universal banking regulations will increase costs or reduce credit availability.
According to him, while Australia is well-placed to recover from the financial crisis relative to most other developed countries, the global economic pace remains "uneven."
He said recent uncertainty over the speed of recovery in the United States and Europe "highlight the downside risks still in play."
"These risks have not helped domestic business and consumer confidence, both of which remain fragile."
"This fragility manifested itself in a slowing in the underlying momentum in our business at the end of the 2010 financial year."
Mr Turner said the country should be cautious about signing up a "one size fits all approach" to global banking regulation, and warned high capital and/or liquidity levels would either push up customer costs or reduce the availability of credit.
The major banks in Australia emerged "relatively unscathed" due to vigorous capital requirements and internal processes, and added Australia already has a solid regulatory system for the financial sector, he said.
He claims 2010 is "another successful year for the group in a number of respects." For one, CBA reported a 42 per cent jump in full-year cash profit to $6.1 billion.
At 1213 AEST, the bank's shares edged up 0.39 per cent to $52.85 against a 0.52 per cent increase in the benchmark index.