Commonwealth Bank records $1.7 billion quarterly profit: Midday roundup

The Commonwealth Bank has recorded a $1.7 billion profit for the three months to March, although warns the outlook for the global economy still remains uncertain.

The company’s cash earnings in the quarter were $1.75 billion.

Chief executive Ian Narev said funding costs were higher in the third quarter, and had a negative impact on the net interest margin.

“Conditions in retail banking remained challenging, highlighted by elevated wholesale funding costs, competitive deposit pricing and subdued credit demand,” the bank said in a statement.

Business lending was also weak, the company said, although business in the wealth management division continued to increase.

IAG will review UK business

Insurance Australia Group will review its business in Britain, the company announced this morning.

The business owns Equity Red Star insurance in Britain, the fifth largest motor insurer in the country, along with commercial insurance group Barnett & Barnett.

Chief executive Mike Wilkins said it was a good time to review the company’s business in the region.

“Given the progress towards that goal in the opening half of the current financial year, we believe the time is right to consider our longer term plans for the business, and the best way to maximise shareholder value,” he said, according to AAP.

The result of such a review could include a sale or a retooling of the business strategy.

Shares flat despite poor market leads

The Australian sharemarket has opened flat this morning despite a shocking night on international markets as fears over fresh elections in Greece permeate the financial industry.

The benchmark S&P/ASX200 index was down 11.8 points or 0.3% to 4153.7, while the Australian dollar has also actually kept some momentum, hovering at $US0.99c.

In the United States, the Dow Jones Industrial Average fell 33 points or 0.3% to 12,598.6.

Billabong founder told CEO to resign

Billabong founder and shareholder Gordon Merchant has told Fairfax he told former chief executive Derek O’Neill that he needed to resign.

”Billabong has been through a lot of growth and their staff have never been fully trained,” he said, also saying that he fully backs Launa Inman as the company’s new chief executive.

Merchant said the appointment was “exactly what they need”.