CBA posts $2.4 billion first quarter profit

Australia’s biggest bank has delivered strong earnings and improved credit quality over the three months to 30 September.

In a trading update yesterday, CBA advised that its unaudited cash earnings for the three months ended 30 September 2015 were approximately $2.4 billion, 4 per cent up on last year's result.

Statutory net profit on an unaudited basis for the same period was approximately $2.3 billion, with non-cash items treated on a consistent basis to prior periods.

“Across key markets, household deposits balance growth was strong and above system,” the group said.

“Home lending continued to trend in line with recent growth rates, whilst core domestic business lending growth remained at mid-single digit levels (12 months rolling).”

CBA noted that its credit quality remained sound, with arrears levels reducing across all consumer portfolios in line with seasonal expectations.

“Troublesome and impaired assets reduced to $5.5 billion. Total loan impairment expense was $220 million in the quarter, with strong provisioning levels maintained and the economic overlay unchanged,” the group said.

CBA’s Basel III Common Equity Tier 1 (CET1) APRA ratio increased 70 basis points to 9.8 per cent in the first quarter of the 2016 financial year, driven by the proceeds of the group’s entitlement offer and capital generated from earnings, partially offset by the impact of the June 2015 final dividend and higher risk weighted assets.

The major bank’s Basel III Internationally Comparable CET1 ratio as at 30 September 2015 was 13.6 per cent, while its Leverage Ratio was 4.7 per cent at 30 September 2015 on an APRA basis and 5.3 per cent on an internationally comparable basis.

CBA’s long-term funding increased by $8.6 billion in the quarter.

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