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CBA Q1 cash profits slide 16%
Australia’s largest bank has been hit by lower margins on credit, rising expenses and higher loan provisions as its quarterly cash profits fell by 16 per cent.
CBA Q1 cash profits slide 16%
Australia’s largest bank has been hit by lower margins on credit, rising expenses and higher loan provisions as its quarterly cash profits fell by 16 per cent.
In a trading update to the market on Wednesday, 11 November, Commonwealth Bank announced an estimated cash net profit after tax of $1.8 billion, down 16 per cent on the same period last year.
The bank said it had reduced its expenses over the quarter but was expecting further customer remediation costs in the second half of the financial year.
CBA said continuing repayment deferrals and government support had “insulated” any issues in its loan book but that it had strengthened its provision coverage to allow for further impacts of the pandemic in future.
The bank said it had seen its household deposits grow by $15.8 billion, home lending by $5.6 billion and business lending by $1.4 billion over the quarter.
Despite the declining profit, CBA chief executive Matt Comyn said “disciplined execution of our strategy” was helping the bank to avoid worse outcomes.
“Our strong balance sheet, focus on operational excellence and the dedication and commitment of our people ensure we remain well placed to support our customers and the wider community through the ongoing challenges of COVID-19,” Mr Comyn said.
The bank reported a $300 million increase in total credit provisions at the end of the September quarter to $6.7 billion, up from $6.4 billion at the end of the financial year as the bank prepares for the impact of COVID.
CBA also reported a 2 per cent rise in expenses excluding customer remediation and reduced earnings on deposits.
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