Commonwealth Bank (CBA) has posted an unaudited cash net profit after tax (NPAT) of $2.5 billion for the quarter ended 30 September (1Q24).
In an update published on Tuesday, CBA said the quarterly result was flat on its 2H23 quarterly average and up 1 per cent on the first quarter of FY23.
Operating income was also flat over 1Q24, driven by volume growth and 1.5 additional days in the quarter while being offset by lower net interest margins.
Net interest income was 0.5 per cent higher, weighed down by lower net interest margins primarily from continued competitive pressure in deposits and customers switching to higher yielding deposits, while home lending margins stabilised.
“We have delivered solid financial outcomes in the quarter reflecting our customer focus and consistent operational and strategic execution,” said CBA chief executive officer Matt Comyn.
“Operating performance was underpinned by a disciplined approach to volume/margin management, delivering sustainable shareholder returns in a competitive market.”
CBA reported that its overall operating performance was flat on the 2H24 quarterly average and up 2 per cent on the prior comparative quarter. Operating expenses increased by 3 per cent due to higher staff costs from wage inflation, partly offset by productivity initiatives.
“Our balance sheet settings remained strong with CET1 (Level 2) ratio of 11.8 per cent, following the payment of $4 billion in 2H23 dividends, well above the minimum regulatory requirement,” said Mr Comyn.
“We bought back more than $700 million of shares to satisfy the dividend reinvestment plan and commenced the previously announced $1 billion share buy-back. We have made good progress on our FY24 funding requirements with $17 billion raised to date, representing ~50 per cent of the FY24 funding task.”
According to CBA, year-on-year volume growth was driven by an 11 per cent increase in business lending, a 5.7 per cent rise in household deposits and a 3.1 per cent lift in home lending.
Meanwhile, overall domestic mortgage balances decreased by $4.5 billion, which the bank said reflected ongoing competition and a disciplined approach to managing margins.
“The Australian economy remains resilient, supported by low unemployment and strong population growth. Higher interest rates are resulting in slowing growth and consumer spending, with pressure on some households and businesses.
“We remain optimistic on the medium-term outlook. Our balance sheet strength, combined with our strong organic capital generation, allows us to support our customers through challenging times. Strong banks benefit all Australians, and we remain well positioned to continue to support our customers, invest in our communities, and provide strength and stability for the broader Australian economy.”
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.