In a statement to the ASX on Wednesday, Commonwealth Bank said it posted an unaudited net cash profit after tax (NPAT) of $2.6 billion in the first quarter ending 31 March, an increase of 6 per cent on the same period a year earlier.
The result was supported by lending volume and higher trading income which propelled the operating income by 1 per cent on the quarter.
Operating expenses similarly added 1 per cent on the back of increased investment in technology and frontline staff.
Loan impairment expense hit $223 million in the first quarter, with collective and individual provisions slightly higher. Meanwhile, portfolio credit quality remained sound, with increases in consumer arrears and corporate troublesome and non-performing exposures.
CBA said it maintained strong balance sheet settings, with a customer deposit funding ratio of 77 per cent, LCR of 133 per cent, and NSFR of 116 per cent.
“We have maintained strong capital and provisioning levels, and have successfully completed our FY25 funding task during the March quarter,” said chief executive Matt Comyn.
“Our deliberate and long-term conservative approach to key balance sheet settings enables us to support our customers, the economy and our shareholders through a range of macroeconomic scenarios.”
Reflecting on CBA’s exceptional sharemarket growth – further boosted on Wednesday by its third-quarter cash profit – Comyn said: “Delivering for our shareholders benefits many Australians.”
“Growing pre-provision profits and strong organic capital generation support strong and sustainable dividends,” he said.
“During the quarter we paid $3.8 billion in dividends which benefitted approximately 814,000 shareholders directly and over 13 million Australians through their superannuation.”
By 12pm, CBA’s share price was up 0.46 per cent to $166.94. Year-to-date, the big bank’s share price has added 8.71 per cent, while over the last 12 months gains stood at just under 40 per cent.
Back in February, VanEck senior portfolio manager Cameron McCormack said the bank’s full-year results reinforced the view that it’s overvalued, warning that the big four lender’s Cinderella story may soon strike midnight.
“We believe the clock is ticking on this Cinderella story and there is limited upside from here,” he said.
“We believe that better value can be found among the other big four banks and across Australia’s mid- and small-caps,” McCormack told InvestorDaily at the time.
Also commenting on CBA’s meteoric rise, AMP’s Shane Oliver said at the time: “It just keeps on keeping on.
“It’s way overvalued, but I have no idea when it will end. As Keynes said, ‘The market can remain irrational for longer than you can remain solvent’.”
