CBA’s quarterly profits fall to $2.4 billion as consumers feel cost of living crunch
CBA boss Matt Comyn says immigration is helping to bolster the Australian economy as the bank reported a second consecutive drop in profit in its latest trading update.
In an announcement to the ASX on Thursday, Comyn said the bank had seen late repayments on personal loans tick up above the historical average and was ready to support customers who were feeling the pressure of higher cost of living but that the Australian economy more broadly remained resilient.
CBA boss Matt Comyn announced a $2.4 billion net profit for the three months to March.
“The fundamentals of the Australian economy remain sound,” he said.
“Unemployment remains low, supported by business and government investment and elevated terms of trade. 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.”
It comes as CBA reported a 3 per cent fall in net profit compared to the first half of the year, pocketing $2.4 billion in the three months to March, and a 5 per cent drop in net profit compared to the same time last year.
The bank said its loan book growth was flat, and its margins were lower, with operating expenses 2 per cent higher amid higher amortisation and staff costs. CBA grew business lending 7.3 per cent, but growth in both household deposits and home lending were below the industry average at 5.6 per cent and 3.1 per cent respectively.
The bank’s net interest margin – a measure of profitability comparing its funding costs with what it charges for loans – fell, with CBA blaming continued competitive pressures and customers switching to higher-yielding deposits.
CBA said its loan impairment expense was $191 million as it raised provisions. However, the bank said credit quality remained sound with moderate increases in consumer arrears and corporate troublesome exposures.
Consumer 90-day-plus late repayments ticked up from 1.14 per cent in the December quarter to 1.34 per cent this quarter, nudging higher than the historic average of 1.25 per cent. Home loan and credit card arrears also increased but remained below their historic averages.
“We expect to see further increases in arrears in the months ahead given continued pressure on real household disposable incomes,” he said.
More to come
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