The Commonwealth Bank of Australia has posted a year-to-end profit greater than any Australian bank ever.

Shareholders will be given the option to buy more shares after it was reported on Wednesday that bank profit soared by five per cent to a record $9.063 billion!

The surge in profits had been expected. Trading was halted as the CBA announced it was raising equity equivalent to $5 billion to meet tougher regulatory standards in line with the Australian Prudential Regulation Authority.

Shareholders will be given the option to buy one new share for every 23 they already own.. The CBA expects around 71 million new shares to be issued to current shareholders.

At the same time the final dividend was raised by four cents to a fully franked $2.22 per share. Financial experts had forecast this to have been released at $2.25 per share.

The Australian Prudential Authority has mandated a raise in the capital reserves of the nation’s banks, to match those held by other top line banks around the world.

The CBA is now following moves by ANZ – who raised already raised $3 billion and the National Australia Bank – who raised $5.5 billion.

Westpac is expected to follow suit soon and appeal to shareholders for more investment, to meet the higher reserve requirements.

CBA chief executive Ian Narev said, “We now have greater certainty regarding the key requirements of global relativity and mortgage risk weights.

“Our announcement today strengthens our position in response to those requirements. This will provide us with ongoing flexibility so we can continue to support our customers.”

However, the bank was crying poor, claiming that emerging competition in the loans market and historic low interest rates has reduced the profit it makes on loans. The bank claimed this profit fell 5 points to 2.09 per cent. Though it also quietly admitted group net interest income had gained by 5 per cent.

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