The financial strength of the Commonwealth Bank has helped the group to maintain its support for customers as Australians continue to feel the pressure from the increased cost of living fuelled by higher inflation and elevated interest rates.

Commenting on the performance of the Bank at its third quarter trading update released today (Thursday 9 May 2024), CEO Matt Comyn said CommBank had continued to strengthen its balance sheet to ensure CBA remained well positioned to help its customers, communities and the economy.

Among the highlights of the third quarter performance were:

  • mortgage lending growing by $4.2 billion supporting people buying a property or re-financing their home loan;
  • An increase of $2.7 billion in lending to businesses which saw diversified growth across multiple sectors of the economy;
  • A rise in the number of transaction accounts to help people access banking services with an increase of 143,000 retail transaction accounts and 25,000 business transaction accounts;
  • The payment of $3.6 billion in dividends, directly benefiting ~840,000 shareholders and more than 12 million Australians through their superannuation;
  • Completing $20 billion year to date of in long-term wholesale funding to enable the bank to provide on-going lending support to the economy.

‘We have continued to focus on supporting our customers and communities, investing for the future and providing strength and stability for the broader economy,” said Mr Comyn. “We know that many Australians are feeling under pressure due to a higher cost of living and we are here to support those customers that need our help.”

Mr Comyn also, said the fundamentals of the economy remain sound. “Unemployment remains low, supported by business and government investment and elevated terms of trade,” he added.

“We recognise that all households are feeling the impact of higher inflation and higher rates, however immigration is providing a structural tailwind for the economy. We will continue to invest in our franchise to deliver a strong, safe and resilient bank into the future.”

Mr Comyn’s comments came as CBA reported an unaudited cash net profit after tax of ~$2.4 billion for its third quarter, down three per cent on the first half of the 2024 financial year quarterly average and five per cent lower on the prior comparative quarter. Unaudited statutory net profit after tax was ~$2.4 billion.

Operating income was one per cent lower, with lending volume growth offset by slightly lower margins and lower income from minority investments and Markets.

Business lending grew above system while household deposit grew by $5.3 billion to $390 billion was just below system and the increase in home loans equated to 0.7 times system growth.

Operating performance fell three per cent on the first half 2024 quarterly average (five per cent on the comparative period 12 months ago) as income decreased one per cent and operating expenses rose two per cent.

On a credit quality basis, the bank further increased its peer leading provision coverage to 1.66 per cent while from a capital perspective the Common Equity Tier 1 Ratio (Level 2) came in at 11.9 per cent. That compares to a banking regulator’s minimum requirement of 10.25 per cent, which translates to $7.7 billion of surplus capital.

During the quarter there was an anticipated increase in consumer arrears and troublesome and impaired assets.

Home loan arrears increased to 0.61 per cent as higher interest rates impacted some borrowers, credit card arrears rose in line with seasonal trends.  Personal loan arrears increased 20 basis points in the quarter.

Troublesome and impaired assets were higher at $8 billion, representing 0.56 per cent of total committed exposures reflecting movements in single name exposures across several industry sectors and higher impaired home loans. Troublesome and impaired assets as a percentage of total exposures remain well below the historic average.

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