As the Coronavirus pandemic continues to sink its tendrils into more and more facets of the economy, the Commonwealth Bank of Australia (CBA) has responded recently by setting aside one and a half billion AUD of their resources in an attempt to offset the losses predicted as a result of Coronavirus shutdowns.
CBA, the biggest bank in Australia, reported that cash profit fell from $AUD 1.7 billion a year ago to $AUD 1.3 billion in the third quarter, which is a 23 percent drop.
Overall net profit for the March quarter dropped to $AUD 1.3 billion from the $AUD 1.75 billion level it was one year ago due to operational income staying stagnant.
The CBA has stated that the setting aside $AUD 1.5 billion was to offset the likely long-term impacts of the Coronavirus pandemic. The consideration of a wide range of best and worst case scenarios sees projections of unemployment hovering around eight percent in 2020 and 2021, whilst housing prices are projected by the CBA to fall over eleven percent over the coming three years.
The Commonwealth Bank of Australia joins its rivals in succumbing to the economic impact resulting from the business restrictions put in place nation-wide in order to stem the spread of the Coronavirus.
Westpac has put aside $AUD 1.6 billion, while ANZ and NAB have secured $AUD 1 billion and $AUD 807 million respectively.
The CBA has also revealed that it will be selling a fifty-five percent stake in Colonial First State (CFS) to global investor KKR for $AUD 1.7 billion.
"The transaction is consistent with CBA's strategy to focus on its core banking businesses and to create a simpler and better bank, while allowing CFS to become a more focused standalone business," stated the CBA when announcing the sale.
The CBA had previously sold off CFS Global Asset Management to the Mitsubishi Group of Japan.