COMMONWEALTH Bank of Australia (CBA) reported a 6 per cent rise in third-quarter cash earnings on Wednesday, helped by growth in lending volumes and higher trading income, and said its margins were stable.
Cash net profit after tax for the country’s biggest lender was about A$2.6 billion (S$2.2 billion) for the three months ended March 31.
Its interest income rose 1 per cent during the period. Home lending volume in Australia grew 4.1 per cent, while business lending increased 9.1 per cent from December 2024 levels.
CBA said its net interest margin for the quarter was stable, excluding non-recurring earnings. It, however, did not provide a figure for the key profitability gauge in the limited trading update.
Analysts at Citi said that CBA’s core earnings were ahead of expectations and margins held up better than peers.
The other three of the country’s so-called “Big Four” banks – National Australia Bank, Westpac and ANZ Group – reported mixed first-half results last week, with margins stable at ANZ but contracting at the others due to an intensely competitive mortgage market.
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“It has been another challenging period for many Australian households and businesses dealing with cost of living pressures,” CBA chief executive Matt Comyn said in a statement.
In February, the Reserve Bank of Australia delivered its first interest rate cut since November 2020, and markets are currently pricing in another 25-basis-point reduction from the central bank next week.
CBA controls a quarter of the country’s A$2.2 trillion mortgage market, and therefore faces a bigger risk to earnings than peers if deposit spreads revert to more normal levels as interest rates go down.
CBA also joined its smaller peers in saying that Australia’s strong economic fundamentals will help the country steer through the uncertainty caused by global trade shifts.
“There is heightened risk to the global economy from geopolitical and macroeconomic uncertainty which could slow the domestic economy. Australia is in a relatively strong position to navigate the challenges,” Comyn said.
Shares of Australia’s biggest listed company were up 0.6 per cent at A$167.12 as of 0110 GMT, not far from the record high touched earlier this month. In contrast, the broader market was down 0.2 per cent.
“Given this quarterly is in-line, with less disclosure provided than peers, and with uncertainty around the rates trajectory over recent days, forward earnings expectations may hold up in the short term which could continue to provide support to the stock,” the Citi analysts said. REUTERS
