Home loans up by $8.6 billion over the quarter
Commonwealth Bank of Australia (CBA) has reported an unaudited cash net profit after tax of approximately $2.5 billion for the first quarter of the 2025 financial year.
The bank’s operating income rose by 3.5% against the quarterly average from the second half of the 2024 financial year, while operating expenses increased by 1%. Operating performance, which measures income minus expenses, was up 1% from the prior corresponding period.
CBA attributed the rise in operating income to stronger volume growth in home lending and household deposits. The bank’s business lending also expanded during the quarter, with an additional $2.1 billion in loans, while business transaction accounts increased by around 29,000 to over 1.27 million.
The bank’s latest trading update also showed a $8.6 billion increase in home lending as CBA focused on retaining existing customers and improving new customer acquisition amid a highly competitive market. Household deposits also grew by $14.9 billion, consistent with the broader market trend.
While cost-of-living pressures remain a challenge, consumer arrears showed improvement due to seasonal factors, higher average tax refunds, and changes to income tax rates. The 90-plus day arrears rate for home loans, personal loans, and credit card accounts benefited from these trends.
Troublesome and impaired assets were slightly higher at $8.8 billion, representing 0.63% of total committed exposures. This remains below historical averages, suggesting continued asset quality resilience.
CBA also maintained a strong capital position, with a common equity tier 1 (CET1) ratio of 11.8% as of Sept. 30, well above the regulatory minimum requirement of 10.25%.
The bank returned $4.2 billion in dividends to approximately 830,000 shareholders on 27 September, funded from its second-half 2024 profit. It also purchased over $750 million in shares to offset the impact of the 2H24 Dividend Reinvestment Plan.
Matt Comyn (pictured above left), chief executive of Commonwealth Bank, said the Q1 results reflect the bank’s commitment to customer support and disciplined operational execution. He noted that despite inflation moderating slowly and global geopolitical tensions creating uncertainty, CBA remains optimistic about the Australian economy, which he described as “fundamentally sound.”
“We have maintained strong balance sheet settings,” Comyn said, citing the bank’s CET1 ratio and provision coverage. “Our balance sheet strength, and solid financial performance, supported the payment of $4.2 billion in dividends in the quarter to around 830,000 direct shareholders and more than 13 million Australians through their superannuation.”
Peter Esho (pictured above right), economist and founder of finance broker Esho Capital, also highlighted CBA’s strong asset quality.
“We’re comforted by the 90-day mortgage arrears rate remaining steady at 0.65%,” he said. “Truely an unbelievable result for CBA given the amount of interest rate increases and business weakness we have seen this year. This is another class act.
“Australia’s residential real estate market is consolidating nicely and the banking system is among the best in the developed world.”
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