The Wall Street Journal-20080214-Commonwealth Bank of Australia- Net Falls Below Expectations Because of Market Volatility

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Commonwealth Bank of Australia: Net Falls Below Expectations Because of Market Volatility

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Commonwealth Bank of Australia said net profit for the first half of its fiscal year rose 8.2%, less than expected, as market volatility stemming from the U.S. subprime-mortgage crisis weighed on earnings. Australia's largest bank by market capitalization said volatility in credit markets is likely to continue until at least the end of the year, which could put pressure on Australian banks to pass on higher funding costs by raising interest rates independent of moves by the Reserve Bank of Australia, the central bank. Commonwealth Bank, of Sydney, said net profit for the six months ended Dec. 31 rose to A$2.37 billion ($2.14 billion) from A$2.19 billion a year earlier. Analysts who follow the company had an average profit forecast of about A$2.48 billion.