Commonwealth Bank Books $2.6 Billion Quarterly Profit, up 2 Percent

CBA recorded $9.3 billion in new home loans, outpacing industry competitors at 1.1 times the system average.

People walk past a branch of the Commonwealth Bank in Melbourne, Australia, on Feb. 6, 2019. William West/AFP via Getty Images

Commonwealth Bank of Australia (CBA) has posted a robust first-quarter result, reporting an unaudited cash profit of $2.6 billion, signalling early momentum as lending activity strengthens across the sector.

The figure is 2 percent higher than the same quarter last year and 1 percent above the average of the bank’s quarterly profit in the second half of last year.

The bank’s update shows a strong rebound in home-lending volumes, buoyed by three Reserve Bank rate cuts earlier in the year.

CBA recorded $9.3 billion in new home loans, outpacing industry competitors at 1.1 times the system average.

Household deposits also grew sharply, rising by $17.8 billion, or 1.2 times the sector average, as customers continued to prioritise savings and seek safer financial buffers.

Business lending rose $2.6 billion, a 10.4 percent increase, broadly in line with the market.

Operating income rose by 3 percent off the back of expanding loan and deposit volumes.

However, the bank reported a decline in headline net interest margins, a key indicator of profitability, reflecting stronger competition, funding pressures, and shifts in customer behaviour.

Australians Still Under Strain

Despite the strong numbers, CBA Chief Executive Matt Comyn warned that the operating environment remained difficult for many households.

“Many Australians have found the past four years challenging, particularly dealing with cost-of-living pressures. Households and businesses have felt some relief recently from lower interest rates,” he said.

“However, cost pressures remain and global issues continue to create uncertainty.”

The bank reported early signs of stabilisation in consumer and corporate arrears, noting that lower interest rates and easing inflation were beginning to support borrowers.

Even so, Commonwealth Bank flagged loan-impairment expenses of $220 million, acknowledging that a growing number of Australians had fallen behind on repayments.

Competition Intensifies

Comyn said the bank was monitoring rapid shifts across the financial system.

“We are closely watching the increased competitive intensity and implications across the financial system, and we will continue to adjust our settings as appropriate,” he said.

Despite the challenges, he maintained an optimistic outlook.

“The Australian economy remains resilient. Economic growth is recovering and disposable income is rising for many households. We remain focused on our strategy to build a brighter future for all,” he said.

Contrast With ANZ’s Results

CBA’s result comes just a day after ANZ reported a steep decline in performance. ANZ’s statutory profit fell 10 percent to $5.9 billion for the year to Sept. 30 following a $240 million penalty for systemic misconduct.

Its cash profit dropped 14 percent, and the bank confirmed 3,500 job cuts by 2026, along with the exit of 1,000 managed-services consultants.