Private banking and business profits fell slightly at the Australia-headquartered bank in the first half of this year, but did better on a 12-month basis.

The business and private banking arm of Commonwealth Bank of Australia said that in the first half of this year it logged net profit of A$716 million ($528 million), a 4 per cent year-on-year dip, while the wealth management arm reported net profits of A$303 million in the six months to 30 June, a year-on-year fall of 13 per cent.

Over the 12 months to 30 June, meanwhile, business and private banking profits rose 10 per cent year-on-year to A$1.459 billion; wealth management profit fell 18 per cent to A$650 million.

For the banking group as a whole, net profit after tax, on a statutory basis, was A$4.528 billion in the half-year period, from A$4.535 billion a year earlier. For the 12-month period, the figure rose 5 per cent to A$9.063 billion, CBA said.

As part of yesterday’s results announcement, the bank said it was launching a A$5 billion pro rata renounceable entitlement offer for all shareholders as part of a capital-raising plan to meet tighter regulatory standards relating to the mortgage market.

Retail banking services’ profit of A$1.875 billion fell 6 per cent; institutional banking and markets fell 6 per cent to A$615, the bank said in a statement. Its New Zealand business saw results dip by 1 per cent, to A$430 million.

Funds under administration stood at A$298.882 billion, a gain of 9 per cent; the net interest margin for the banking group was 2.07 per cent, down by five basis points. Operating expenses to total operating income stood at 43.3 per cent.

Costs rose at the group, CBA said, up by 5 per cent on the prior year because of staff expenses and the adverse impact from depreciation in the Australian dollar.

The major driver of expense growth was growing regulatory, compliance and remediation costs, including those associated with a number of legislative reforms (FATCA, FoFA, Stronger Super) and money that has been set aside to pay for the bank’s review of previous financial advice to clients. (The bank’s advice review programme has been initiated to deal with complaints in the past of poor advice in its wealth management business.)