(7 May 2015 – Australia) Commonwealth Bank of Australia (CBA)’s third quarter cash profit was hit by higher expenses and pressure on its profit margins with strong competition for loans hitting the bottom line.
The unaudited cash earnings of A$2.2 billion for the third quarter, was unchanged from the same period year-on-year.
CBA said it achieved revenue growth of 5 percent amid subdued conditions.
Expenses were higher than previous quarters, hit by higher regulatory costs, including costs of provisioning for its new advice review program.
Group net interest margins were impacted by competitive pressures.
Credit quality remained sound and impaired assets fell to A$6.4 billion from A$6.5 billion in the second quarter.
“Credit quality remained sound. In the retail portfolios, home loan and credit card arrears were broadly flat, whilst seasonal factors contributed to higher personal loan arrears,” the statement said.
Household deposits expanded by more than 10 percent in the quarter, funds under administration in CBA’s wealth division grew by 7 percent and assets under management expanded by 8 percent.
The bank was slammed following its decision to pass on 0.20 percentage points of the 0.25 percentage point cut in official interest rates by the Reserve Bank of Australia.