Commonwealth Bank (CBA) has reported an unaudited statutory net profit after tax of $2.6 billion in its third quarter trading update released to the ASX on Tuesday.
This was up 1 per cent on the quarterly average in the first half of its financial year, or 3 per cent on a day-weighted basis, and 10 per cent higher than the prior comparative quarter.
“Our focus on customers, underpinned by our balance sheet strength and consistent operational execution has delivered record customer advocacy scores, volume growth across our core markets, with strong earnings and capital generation,” said CBA chief executive officer Matt Comyn.
Mr Comyn noted that CBA’s capital position remains “strong” with a CET1 (Level 2) ratio at 12.1 per cent following the payment of $3.5 billion in dividends for the first half.
“We have maintained our disciplined approach to managing credit, interest rate, funding and liquidity risks, and our balance sheet strength positions us well to continue to support our customers and extend the credit required to grow the Australian economy,” Mr Comyn said.
The bank indicated that its income was flat during the third quarter, with net interest income down by 2 per cent and non-interest income up by 11 per cent.
Volume growth was reported to have been offset by lower net interest margins, primarily attributed to continued competitive pressure in home loan pricing and customers switching to higher yielding deposits. CBA stated that competition for home loans “has remained intense”.
Home lending grew by $6.9 billion over the quarter and household deposits grew by $6.2 billion. Meanwhile, business lending rose by $2.6 billion and business deposits rose by $0.7 billion.
Expenses were flat on a headline basis, or down by 1 per cent when excluding remediation. CBA’s operating performance was also flat on the 1H23 quarterly average, while being up 2 per cent on a day-weighted basis and up 18 per cent on the prior comparative quarter.
Operating performance was flat on the quarterly average of the first half, or up by 2 per cent on a day-weighted basis and up 18 per cent on the prior comparative quarter.
Mr Comyn noted that as higher interest rates impact the Australian economy in the period ahead, the bank expects that economic growth will continue to moderate.
“Despite the challenging global economic outlook, Australia is relatively well positioned given the strength of our banking system, the economic tailwinds from a recovery in population growth and relatively high commodity prices,” he said.
“We remain positive on the medium-term outlook. The strength of our balance sheet means we are well placed to continue supporting our customers and the broader Australian economy while delivering predictable and sustainable returns to our shareholders.”