The Commonwealth Bank (CBA) has reported “strong financial and operational outcomes” in its first quarter results released on Tuesday, including a cash net profit after tax of $2.5 billion.
This was 2 per cent higher than the quarterly average from the second half of FY22 and 13 per cent above the prior corresponding period one year earlier.
CBA CEO Matt Comyn said that consistent and disciplined execution of the bank’s strategy had also helped it to achieve a 12 per cent lift in operating performance and sound portfolio credit quality.
The boost to operating performance was said to be driven by higher operating income, including stronger deposit earnings and volume growth across all core products, while being partly offset by the impact of competition and rising interest rates on lending products.
“In a competitive environment, we remained disciplined and achieved good volume growth in our core markets,” said Mr Comyn.
Income was up 9 per cent due to higher margins and volume growth, which the bank said was partly offset by reduced non-interest income. Higher staffing costs saw expenses increase by 4.5 per cent, partly offset by lower software amortisation and occupancy costs.
Home lending lifted $5.1 billion or 6.3 per cent; business lending rose 12.6 per cent or $1.6 billion; and household deposits grew by 8.6 per cent or $7.9 billion.
CBA’s net interest income gained 16 per cent on the back of higher deposit earnings, volume growth across core products, the benefit of rising rates on replicating portfolio and equity hedge balances, and the 1.5 additional days in the quarter.
Meanwhile, non-interest income fell by 17 per cent, which the bank said was primarily driven by lower net profits from its Chinese bank investments and lower insurance income due to flooding.
“Our strong balance sheet positions us well to continue helping customers achieve their financial goals, consistent with our purpose to build a brighter future for all,” said Mr Comyn.
“The economy has shown resilience in the face of growing cost of living and interest rate pressures, and despite these near-term challenges, we remain optimistic on the medium- to long-term outlook.”
