Big four bank's mortgage loan growth powers ahead
Following on from yesterday’s record-breaking announcement from Macquarie Bank, Commonwealth Bank has announced that mortgage loan growth has helped power the country’s biggest bank to a cash profit of $4.75 billion over the last six months of 2021.
The results, which beat analysts’ projections by 10%, will allow CBA to give $2 billion back to investors.
The bank, however, has warned that its loan margins could suffer from the competitive pressure loan margins are under pressure from tough competition, and that it believes that there could be a hike to the cash rate within months. CBA’s figures show the effect that competition is having on its performance – its net interest margin has slumped 17 basis points to 1.92% over the same period. This figure was well below the expected 1.96% that the market had been expecting.
Business lending volumes improved too showing an impressive 12.5% growth over the same period a year before, with the bank’s business book growing at 1.7 times the broader system.
The bank expect mortgage rates to start rising in August – bad news for borrowers, maybe better news for banks as CBA calculates that it will gain 4 basis points in margin for every 0.25% that the RBA raises mortgage rates.
