Commonwealth Bank of Australia, the nation's biggest mortgage lender, rose the most in more than two months in Sydney trading after saying first-half profit was about 20 percent higher than analysts estimated, Bloomberg reported.
Net income for the six months ended Dec. 31 fell 16 percent from a year earlier to about A$2 billion ($1.3 billion), the company said in a statement after the market closed yesterday. Commonwealth Bank said it beat a "market consensus" forecast for profit, without specifying.
Commonwealth Bank rose as much as 9.7 percent, and shares in National Australia Bank Ltd. and Westpac Banking Corp. gained, as the report spurred optimism that the nation's lenders have evaded the worst of the financial crisis. Commonwealth Bank may also have benefited from increased market share and more profitable lending, said fund manager Prasad Patkar.
"The market completely underestimated revenue, which got a big boost from market share gains and margin expansion," said Patkar, who helps manage $800 million at Platypus Asset Management in Sydney, including Commonwealth Bank shares. "The share price performance going forward will be driven by the profile of bad debt charges."
Shares in Commonwealth Bank rose 9.5 percent at 12:01 p.m. in Sydney, the biggest intraday gain since Nov. 25. National Australia, the country's biggest bank by assets, climbed 6.3 percent and Westpac, the largest by market value, advanced 8.1 percent.
Commonwealth Bank said net income including a one-time gain of A$550 million on the acquisition of HBOS Plc's Bankwest unit rose 9 percent to more than A$2.5 billion. The lender will take a bad debt charge of about A$1.6 billion, in line with analyst estimates, it said.
Commonwealth Bank is scheduled to report earnings for the six months ended December on Feb 11.