The Commonwealth Bank has today reported a 10% lift in net profit to $2.19 billion for the December half year, sparking a 19c rise in its share price to a record $51.79.

That puts the CBA within just $300 million of once again over-taking NAB as the country’s biggest bank in terms of market capitalisation – with both now closing on $67 billion.

One interesting exchange at the recent NAB AGM in Adelaide was over the question of which bank could claim to be the biggest.

NAB Chairman Michael Chaney professed to only be interested in being the best – which is what you’d expect from someone who was close to surrendering the “biggest” title after almost 20 years.

This is how the NAB lines up on the various key measures that reflect banking bigness:

Net Profit: $4.392 billion

Total Assets: $484.8 billion

Funds under management: $97 billion

Net interest income: $8.686 billion

Operating expenses: $7.642 billion

Bad debts charge: $606 million

Income tax expense: $2.134 billion

Market Capitalisation: $66.77 billion

Whilst the CBA figures are half year to December and NAB is for the year to September 30, we’ll double some of the CBA figures to see how they stack up by comparison:

Net Profit: $4.38 billion

Total Assets: $397 billion

Funds under management: $168 billion

Net interest income: $6.97 billion

Operating expenses: $6.288 billion

Bad debts charge: $390 million

Income tax expense: $1.468 billion

Market Capitalisation: $66.45 billion

Clearly the net profit and market capitalisation figures are both line ball. NAB is the bigger bank, whilst CBA is much larger in funds management.

Meanwhile, former NAB chairman Graeme Kraehe has enjoyed a very nice reprieve today after the travails of the bank’s $360 million foreign exchange losses.

Treasurer Peter Costello has appointed him to the Reserve Bank board whilst also confirming an insider, Rick Battellino, would take up the long vacant deputy governor position.

It’s a controversial appointment and something that Catherine Walter would be most surprised about given the way APRA threw the rule book at NAB in the aftermath of the losses and Kraehe was chairman of the board’s risk management committee at the time.

Peter Fray

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