The Commonwealth Bank of Australia logo adorns its head office in central Sydney, Australia, October 12, 2017. REUTERS/David Gray

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  • CBA cash profit climbs 23%, beats estimates
  • Announces $2 bn share buyback, A$3 bn in dividends
  • Australian economy will have a strong 2022 – CEO Comyn

Feb 9 (Reuters) – Commonwealth Bank of Australia (CBA.AX) on Wednesday posted a jump in first-half profit and said it would buy back shares worth $2 billion ($1.43 billion $), strong loan growth cushioned the blow of intense competition for home loans.

The bank said its loan growth outpaced its competitors in the corporate and personal segments in the last six months of 2021, helped by a post-pandemic recovery in the economy.

But its margins narrowed to 1.92% from 2.06% a year earlier and were 17 basis points below the second half of fiscal 2021 due to stiff competition in the industry.

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The ABC said the weakness was likely to continue as the country’s lenders try to protect their market share by offering more attractive home loan rates. Margin pressure has also been compounded by a shift in customers to fixed rate loans, which tend to be cheaper than variable rates.

Rivals Westpac (WBC.AX) and Australia and New Zealand Banking Group (ANZ.AX) also reported pressure on margins in recent days and National Australia Bank (NAB.AX), the latest in the so-called “Big Four” is expected to follow with a similar warning on Thursday.

CBA’s cash profit soared to half $4.75 billion from A$3.87 trillion a year ago, beating an average estimate of A$4.35 billion from four brokerages.

Chief Executive Matt Comyn said he expected the country “to have a good year in 2022” as it reopens its borders to the world.

The lender also raised its interim dividend to $1.75 per share, for a total of about $3 billion, from the $1.5 per share it paid to shareholders a year earlier.

Its new buyout comes on the heels of a record $6 billion A-share buyout it undertook following its annual results in August.

($1 = 1.3994 Australian dollars)

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Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Aditya Soni

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