Australia’s largest bank has announced bumper quarterly cash profits, but its boss warns global uncertainty could soon slow the Australian economy.
In a statement to the ASX, Commonwealth Bank revealed its cash profits rose 6 per cent to $2.6bn in the March quarter, on the back of strong lending to Australian businesses.
The bank said business loans surged 9.1 per cent or $3.7bn within those three months, outpacing its home-lending volumes which grew 4.1 per cent.
Importantly for shareholders, CBA said its net interest margin – a key measure of profitability – held stable in the quarter, excluding non-recurring earnings, although it did not provide the figure in its trading update.
Westpac, National Australia Bank and ANZ all announced mixed first-half results last week due to profit margin concerns, citing an intensely competitive mortgage market.
CBA chief executive Matt Comyn said the impacts of global tariffs could slow down the Australian economy.
“There is heightened risk to the global economy from geopolitical and macroeconomic uncertainty which could slow down the domestic economy,” he said.
Mr Comyn also warned of the pressures currently on Australian households on the back of higher interest rates.
CBA said collective and individual provisions for bad debts were “slightly higher”, costing the bank $223m.
The bank pointed to an increase in consumer arrears and troubled corporate and non-performing exposures.
“We know it has been another challenging period for many Australian households and businesses dealing with cost-of-living pressures,” Mr Comyn said.
“We have remained focused on proactively engaging with our customers on a range of support options to help those who need it most.”
While households are facing pressures, the bank said household deposits were also 4.8 per cent higher through the quarterly period.
Despite these challenges, Mr Comyn said Australia was starting in a relatively strong position and remained an attractive place to live and work.
“Government investment in infrastructure and services is helping to support employment and growth, and underlying inflation is moderating,” he said.
Mr Comyn said the bank paid nearly $3.8bn benefiting 814,000 shareholders directly, and a further 13 million Australians through their superannuation.
“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,” he said.
