14 May 2009

25% cut in dividend tipped by CBA

5:59 am on 14 May 2009

The Commonwealth Bank of Australia has flagged a cut of 25% in its final dividend and says it will continue to put more away to cover bad debts.

In a trading update for the March quarter, CBA, which owns the ASB, says it earned a cash profit of $1.15 billion, helped by the purchase of BankWest in Britain from HBOS last year.

Over the past three weeks, three of Australia's top four banks have reported a sharp rise in bad debts, eroding their first-half profits.

CBA says rising unemployment and slowing credit demand will hurt the banking sector, resulting to slowing lending and growing bad debts.

The bank's total impaired assets rose about a fifth to $A3.4 billion in the March quarter.