(18 May 2012 – Australia) The Commonwealth Bank of Australia (CBA) delivered a third-quarter cash profit of A$1.75 billion on Thursday, but stated competition for deposits and subdued demand for loans was hurting profit margins.The latest result for the three months to the end of March is just 3 percent more than a year earlier and matched the average estimate of five analysts polled by Reuters.
The result puts CBA on track for a bumper full-year profit of almost A$7 billion.
The bank, Australia’s largest, also said its net profit for the quarter totaled about A$1.7 billion, again prior to an audit.
CBA said higher funding costs continued to have a negative impact on interest margins – a key gauge of bank profitability.
CBA chief executive Ian Narev said he would continue to run the bank on “conservative settings”.
“Consistent with the uncertain outlook that we indicated at the group’s half-year results in February, we have retained our conservative business settings, including tight expense control, a conservative funding profile and strong provisioning levels,” Narev said.