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News.com.au
3 minutes ago
- News.com.au
CBA boss defends stock plunge after record $10b cash profit
The boss of Australia's biggest bank has come out swinging after a $15 billion bloodbath that has hit more than 10 million Aussies. Commonwealth Bank chief executive Matt Comyn brushed off suggestions it was 'overpriced' after its share price saw a sharp drop despite posting a record $10.25 billion profit. He said it would 'focus on the things that we can control' after more than five per cent or $9 was wiped from its share price on Wednesday. That meant $15 billion was slashed from the company's value in the hours after it announced cash profits rose by four per cent over the past financial year. An expert says the drop could be a result of investors believing the latest profit margins did 'not shoot the lights out' and a move toward other banks and other parts of the market. Speaking to ABC radio on Thursday, Mr Comyn stressed the bank was looking at long-term performance and not daily fluctuations on the stock market. 'I think from our perspective, we focus on all the things that we can control, which is obviously doing kind of a great job serving and customers continuing to grow,' he said. 'In the last year, every day we helped 400 households buy a new home (and) we've leant $150 million. 'I think if we do all of those things well and we continue to invest in our technology and a better customer proposition, we should also be able to deliver a reasonable rate of return to our shareholders over time. 'Of course, we're conscious of share price performance … more than 10 million Australians own the Commonwealth Bank, either directly or indirectly. 'And it's really about thinking about the long term of that performance versus a performance on a particular day.' CBA is favourite buy for superannuation funds. Size matters when it comes to investing, and the bigger you are the more you will get from so-called passive investing. This means people may not be actively seeking out CommBank shares but they are buying them passively because they are now such a big part of major part of index funds like the ASX200 or superannuation funds. Commonwealth Bank takes up a massive 11.5 per cent of the ASX200 — an index of Australia's top 200 companies. This means that for every $1000 someone invests in the ASX200, CommBank will get roughly $115 while is next biggest rival Westpac will get just $45. Why CBA is getting smashed There has been debate in recent months about the market valuation of CBA, including after it became the first ASX-listed company to hit a value of more than $300 billion in June. It came as shares surged 30 per cent over the past year to a high point of $191.40 on June 25, but by Thursday morning that had fallen to as low as $166. Shane Oliver, chief economist at AMP, explained that Wednesday's drop showed investors did not think CBA's profits were in line with expectation. 'When a company share is being pushed up to very high levels, it gets harder and harder for profit results to beat expectations,' he told 'And so while the profit results were pretty good, it didn't shoot the lights out relative to what the market had sort of factored in.' Mr Oliver said CBA's stock price had been declining steadily since that June high, saying market 'rotation' was at play. He noted that another of Australia's big four banks, Westpac, had enjoyed a share price surge after releasing its latest quarterly figures on Thursday. 'The market has become very overexposed to CBA, less exposed to the other banks,' Mr Oliver said. 'And there's I guess a bit of a rotation going on. CBA has been under some pressure since the high in June, and it's come in various leaps. 'Part of it was a rotation towards the miners as the iron ore price started to rise. 'If you look at the chart (there was a) big down … from the high in June and it's stabilised for a while and then another leap down in July and then rallied up again. 'Now it's at another leap down to a new low. So it's investors sort of positioning away from it to some degree in favour of some of the other banks and other parts in the market.' Equity analyst Michael Haynes from Atlas Fund Management said CBA was not the first to see big stock falls in spite strong results this reporting season, pointing to similar events with QBE and JB Hi-Fi. 'Ultimately the business itself (CBA) is still operating quite strong, taking market share across both the retail and business bank,' he said. 'But the shares are a bit disconnected from the actual business itself, trading on quite high multiples compared to the actual growth of the profits.' Share trader author Alan Hull told in June that CBA stocks were 'a risky share to be buying'. 'Smart money is not buying CBA,' he said. 'It's seriously overvalued. It's earnings growth is anaemic. The current dividend yield is 3.74 per cent including tax imputations.' The bank announced on Wednesday it was raising its dividend to $2.60 per share. In April Kevin Doodney, an Australian housing futurist at the High Yield Property Group, said the ballooning bank stocks and profits was being fuelled in part by the nation's housing crisis. 'In fact the 'big four' Australian banks make up four of the eight most profitable banks in the world,' he told 'They are making that money from a population of just 27 million people. There's 8 billion people out there, for Christ's sake. 'What the Australian public needs to ask is, how on Earth can that be possible? Because, I think the Australian people are going to look at that and go, nah, that's not possible.' CBA's deal with OpenAI Also announced on Wednesday was CBA's new partnership with OpenAI, becoming the tech giant's 'strategic banking partner in Australia'. The announcement stated the companies would work together on 'advanced generative AI solutions' to scam, fraud and customer service. Mr Comyn told ABC radio the bank would 'like to work with them on some of the most important issues facing financial services, which are specifically scams, fraud, cyber and financial crime'. 'Last year, we spent more than $930 million in those areas. And we've reduced customer losses by 76% over the last few years,' he said. 'But we think there's a lot more it could be done.' Sam Altman, the boss of OpenAI, said it was 'excited to work together to put advanced AI into the hands of more Australians, making it more useful and impactful for people and businesses across the country'. CBA courted controversy last month when it revealed 45 call centre jobs would be axed and replaced by an AI chat bot, but Mr Comyn said that needed to be viewed in context. 'We employ approximately 50,000 people. We added more than 2000 over the last financial year across a broad range of roles. 'And of course, any job reductions are challenging, I think what we can do is most importantly be transparent about what we're trying to do and why.' He said the bank would work with OpenAI to build capacity for its workforce and 'essential skills which will be required for the future economy'.
ABC News
3 minutes ago
- ABC News
AI could be the government's productivity answer. But getting there will mean more disruption
For many Australians, artificial intelligence is already disrupting their work. Among them is voice actor Colin Cassidy, who after decades of building his career said he had his voice cloned without his consent. "It's a little bit like a redundancy which is very stressful from a mental health point of view," he said. "But it goes deeper because it's your biometric data, it's part of you." Mr Cassidy estimated his booking numbers have reduced by 30 per cent due to AI. He said the voice-over industry, which is already being hit hard by cloning, is the "canary in the coal mine". "AI is here to stay and it's going to continue to develop and put more voice overs out of work, which is a tragedy." While the full extent of future job losses from AI is not known, the World Economic Forums expects at least 9 million jobs could be displaced globally, and the nature of work for even more could change dramatically. A report from Jobs and Skills Australia this week however found AI was more likely to augment human work than replace it, highlighting the importance of people having the right digital and AI skills for a modern labour market. Modelling by non-profit organisation The Social Policy Group last year found a third of the Australian workforce could be disrupted by 2030 due to the adoption of AI. Impacted industries included agriculture, mining, manufacturing, retail trade, telecommunications and real estate services, as AI streamlines operations, automates tasks and enables data-driven decision-making. Australian businesses are already adopting AI through automating technology such as forklifts, irrigation systems and check-out systems in retail stores and supermarkets. In manufacturing, robots are increasingly helping with tasks such as assembling, packaging and distribution. AI is also listing properties, screening tenants and managing leases in real estate, as well as performing document reviews and legal research — tasks typically done by paralegals and junior lawyers. But it's these disruptions that could deliver a $116 billion productivity boost to Australia's economy, according to the Productivity Commission's estimates. Nicholas Davis is a co-director of the Human Technology Institute at the University of Technology Sydney, whose research focuses on ethical and responsible use of AI. He said potential job losses due to AI fall into two categories. "One category is where your job has a bunch of tasks that are relatively repetitive and routine and therefore can be understood and done by digital systems," Mr Davis said. "The second is people who do things that are relatively complex and valuable but for which we see specific AI applications coming out now, like voice cloning." Mr Davis said the more diverse a worker's job tasks are, the better their protection from AI. "The more that is a mix of interactive, human facing, client facing, public facing activity, the more you're probably less worried at this stage," he said. Ahead of the federal government's productivity round table next week, the Productivity Commission warned over-regulation could stifle AI's multi-billion-dollar economic potential. At the time, Treasurer Jim Chalmers welcomed the report, calling AI a "game changer" for the Australian economy. "We can chart a middle course that makes our workers and our people and our industries' beneficiaries, not victims of technological change," he said. Skills and Training Minister Andrew Giles said the government was focused on supporting Australians to make the most of the benefits of AI, "including in how people can upskill to use it in their day-to-day work". "We recognise this is a deeply complex issue. We are stepping through these issues carefully, ensuring that our approach to AI regulation is aligned with Australian values, and benefits Australians," Mr Giles said. In the past, technological advances have seen businesses expand, such as the introduction of ATMs. "The fear was that would take away bank teller jobs and it actually ended up increasing employment," Mr Davis said. "By making it easier to withdraw money, it lowered the cost of having the branch. "It meant there was an expansion of other services, including lending mortgages and other aspects that increased net employment." But Mr Davis warned it would be a mistake to assume that all productivity benefits would materialise. "We're really focused on hoping that all these benefits will occur and trying to push off the thought that maybe some of it won't," Mr Davis said. There are growing calls from unions and creative industries for better regulation of the technology to protect jobs. Unions will head into next week's round table calling for mandatory enforceable agreements that would ensure employers consult with staff before new AI technologies can be introduced. Mr Davis's research found businesses can harness greater benefits from AI if they include workers in the adoption process. "Worker engagement around AI is not a nice to have ... it's actually an essential component of realising the productivity gains from the new technology." He said there were currently "huge gaps" in privacy law and copyright intellectual law that needed to be filled. "Far from being a barrier to innovation, the organisations I speak to want regulatory certainty, they want to know what the rules are, they want to know that makes them trustworthy as they use AI," he said. "AI is a really powerful and transformative set of technologies. "It would be silly of us to say let's just let it rip without saying, 'Hold on a second, what benefits do we want and how can we best get those?'" Earlier this month former industry minister Ed Husic also advocated for an AI Act that could help to safeguard against its risks. But Tech Council of Australia chair Scott Farquhar has urged the government not to regulate as a first resort. Earlier this week, he said many of the harms that are known now are covered by existing regulation. He expected some jobs would be lost, such as call centre workers, but said jobs could also be created out of AI and an increased number of data centres. "I'm asking the unions to help us train new jobs and let's get them done faster so it's not a four-year apprenticeship," he told 730. "I'm asking unions to help us evolve for jobs there are less of, how do we get those people into new jobs?" Mr Cassidy has adapted to AI by engaging in more performative work, and is also exploring ethically cloning his voice. He wants to see specific AI regulation as well as support for artists when it comes to enforcement of existing or future laws. "I don't have the budget to take this to court and go the full mile," Mr Cassidy said. "There are hundreds of situations like mine that need financial help, need legal help, need sponsorship in some way to actually communicate the depth, length and breadth of this problem."
ABC News
33 minutes ago
- ABC News
Residents want flight curfews and caps as new overhead paths considered for Brisbane Airport
For 20 years, Bridgette McKelvey has enjoyed the simple pleasures of living in her timber Queenslander home. Tucked away in the riverside suburb of Highgate Hill, in Brisbane's inner south, she has lived a quiet life, raising her family in the mostly heritage-listed area, without wanting for much more. Now, she says she wakes several times every night to the sound of jet engines flying overhead. "Over the last couple of months, to my alarm, we've suddenly turned into a relentless flight path," Ms McKelvey said. "I counted yesterday morning, in the space of half an hour there were 15 jumbo jets flying directly over our house, which of course is really intrusive." "I know I'm not alone in my experience; it's been bubbling away in Brisbane for the last few years and now our community is being affected." Noise complaints skyrocketed after the opening of Brisbane Airport's $1.1 billion second runway in 2020. In a bid to eliminate some of the disruption, Simultaneous Opposite Direction Parallel Runway Operations (SODPROPS), or plans to fly offshore over Moreton Bay, were introduced in late 2024. SODPROPs can only be used in certain weather conditions, but have resulted in a change to flight paths, like the uptick in traffic Ms McKelvey noticed over her home. With consultation open on proposed changes to the flight paths around Brisbane, she's worried unsuspecting residents in suburbs across the state's capital could face a similar reality. Airservices Australia — which designs the flight paths and airspace around airports — is leading consultation on a new plan to address the level of noise impacting suburbs in flight paths. Maps have been released with proposed changes, including shifting current paths. Head of Community Engagement Donna Marshall said the aim was to find improvements and get feedback from the community. "We're looking at communities that have multiple operations over them, day and night or multiple directions of flight paths… and looking to spread those out," Ms Marshall said. Aircraft fly best into the wind, so in certain wind conditions, "as many as 500,000 people" can be impacted by flight noise, Ms Marshall said. "Obviously when you move a flight you affect new people, but it affects the current people less often. "We're hoping that provides a nice balance that the community will support and appreciate." The "noise-spread approach" would maintain the same number of flight paths and reduce the frequency of planes over some communities by pivoting aircraft to fly over others nearby. One proposed flight path shift in the north-west would see less traffic over areas like Samford Valley and Cedar Creek — around 40 kilometres from the airport — but more flights over Everton Park and Brisbane's CBD. To the south, Logan City gets reprieve, as more flights travel over Bulimba, Balmoral and West End. In a statement, Airservices Australia acknowledged some of these areas may have higher populations, but said the changes are needed to allow the shift to the arrival path. Brisbane Flight Path Community Alliance (BFPCA) chair Marcus Foth argues the latest proposal isn't fair for anyone. "What they are trying to do is shifting the noise from one community to another community and we don't believe that this is the right approach," he said. He believes the current proposal won't yield any reduction in noise overall. "We are seeing an engagement phase where communities are pitted against each other, it's a tactic that we call divide and conquer. "We see Bayside communities being rightly upset about what's been proposed, but other communities also being very concerned about noise just being pushed towards each other." The BFPCA has called for the introduction of flight caps and curfews at Brisbane airport. It would see the airport adopt a similar approach to airports across the country, including Sydney, Adelaide and the Gold Coast. "Rather than actually resolving this issue by introducing the same measures … we are not seeing any sacrifice, any compromise whatsoever," Mr Foth said. "Our main demands are about caps and curfew, in addition, we want to see an entire package that is modelled around the same noise abatement instruments that have been introduced in Sydney in the 90s." Mr Foth also has concerns about an uptick in flights in the coming years, as the city prepares for an influx of traffic associated with the 2032 Olympic and Paralympic Games. "People think this is going to give them reprieve, but [because of the growth strategy] any kind of reprieve is only going to be temporary," he said. "Airports can live in harmony with host cities … Sydney hosted the Olympics in 2000, and all those community protections were already in place at that time." But the decision-making power to implement restrictions like caps and curfews fall to the discretion of the federal Department of Infrastructure, Transport and Vehicles. The federal government's position is outlined is the aviation white papers as being "committed not to impose any additional operating constraints on airports… where they currently do not exist." Residents in affected areas are encouraged to make submissions before the consultation period closes on August 17. Airservices Australia said a decision on what to implement, as informed by the community, would be made in the coming months.
