(7 November 2017 – Australia) Commonwealth Bank of Australia (CBA) announced that its first-quarter cash profit jumped 10 percent, exceeding analyst expectations, as impairment charges fell to a record low and higher mortgage rates widened its home-lending margins.
The result for Australia’s No. 1 lender caps a run of bank results which have included some of the lowest bad debt charges on record, but left concerns that lenders may not be fully prepared for a downturn in the property and retail sectors.
CBA’s cash earnings were A$2.65 billion for the quarter.
Net profit rose 16.7 percent to A$2.80 billion. Net interest margin improved although the bank did not provide a number.
Bad debts fell to A$6.1 billion from A$6.8 billion a year ago, while bad loan charges edged down to A$198 million, or a record low of 11 basis points of gross loans.
Prior to the results, Fitch that earnings at Australia’s biggest banks would come under pressure because of slowing revenue growth and higher impairment charges.
CBA’s common equity Tier-1 capital ratio at the end of September rose to 10.1 percent from 9.4 percent a year ago, below the regulator’s target of at least 10.5 percent.
CBA’s full-year reporting period is to the end of June.