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CBA profits drop but number of bad debts starts to fall

COMMONWEALTH Bank of Australia, the country&rsquo;s third-largest lender, saw full-year pre-tax profit fall nine per cent to A$5.8bn (&pound;2.9bn) yesterday, compared to A$6.4bn in 2008.<br /><br />However second half profit at the bank registered an 18 per cent improvement, rising to A$3.2bn from $2.7bn in the first half of its fiscal year, which ended on 30 June.<br /><br />The bank was helped by lower than expected bad debt charges in the second half, with impairments falling to A$1.33bn compared to A$1.6bn in the first six months.<br /><br />But full year impairment hit A$2.9bn compared to A$930m in 2008 and chief financial officer David Craig refused to rule out bad debts rising again, saying that it was &ldquo;too early to declare victory on that&rdquo;.<br /><br />Chief executive Ralph Norris said: &ldquo;The group is emerging from the global financial crisis in a very strong position.&rdquo;<br /><br />Australian banks have emerged relatively unscathed from the financial crisis and the country has maintained positive GDP growth figures while European countries and the US have floundered.<br /><br />But a slowdown in growth, coupled with rising unemployment, has led to increasing bad debts among the country&rsquo;s lenders.<br /><br />The bank also confirmed that it was cutting its full-year dividend by 14 per cent and declared a final dividend of A$1.15 per share.<br /><br />Its results were helped by the acquisition of Australian lender BankWest, which it bought from Lloyds earlier this year.