CBA’s Comyn says recovery ‘simply pushed back’ as bank splashes cash

Commonwealth Bank boss Matt Comyn is betting on a strong economic rebound from lockdowns in the final quarter of 2021, stressing the importance of vaccines as the bank unveiled a $6 billion share buyback and sharply higher profits.

In a sign of optimism from the country’s biggest bank, CBA on Wednesday raised dividends and slashed charges for soured loans, as cash profits rose by a fifth to $8.65 billion for the financial year.

Mr Comyn said CBA stood ready to assist customers struggling due to recent lockdowns, but the roughly 400 requests a day for loan deferrals it was receiving were a fraction of the peaks seen last year.

Citing the experience of last year, Mr Comyn predicted business and consumer confidence would quickly recover from the current lockdown-induced slump. The lockdown may take some of the heat out of the housing market, he said, but argued this would be good news when annual price growth was near 20 per cent.

“While Australia faces near-term challenges due to the lockdowns, we expect growth will simply be pushed back by six months with the economy rebounding in late 2021 and growing strongly in 2022,” Mr Comyn said.

Even so, he also acknowledged the high level of uncertainty, saying the bank was considering a wide range of scenarios that changed almost daily.

Almost seven weeks after Sydney went into lockdown, Mr Comyn backed the government’s official policy of suppressing the virus until vaccine coverage was higher, but said beyond that point “eradication” of the virus would not be possible.

“There’s clearly a lot of work under way to accelerate the rollout. The next few months are going to be critical and hopefully the [COVID-19] numbers will come down, and in parallel the vaccination numbers will continue to increase,” he said.

Managing director of White Funds Management, Angus Gluksie, said CBA’s upbeat view on the economy could be too optimistic, given some experts’ view that restrictions may be needed even with high vaccine coverage. “It’s a bit wishful but it’s very much predicated on a vaccine strategy getting us to a point of normality,” Mr Gluskie said.