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A Morningstar report last week noted that CBA earnings growth “disappointed” in the March quarter.
“The trading update highlighted ongoing net interest margin pressure and higher than expected expense growth due to growing compliance and regulatory costs,” the report said.
“Volume growth is good, though loans continue to grow modestly below the system growth rate.”
While CBA’s net interest margins were not disclosed in its trading update last week, Morningstar believes margins are trending lower than 2.12 per cent.
“We expect lower average funding costs to partially offset lower lending interest rates, but intense competition continues to erode margins,” the report said.
Morningstar has reduced its forecast net interest margin for CBA to 2.10 per cent from 2.12 for the 2015 financial year.
CBA was the first of the big four banks to move on rates following the Reserve Bank rate cut last week. However, like many lenders, the bank did not pass on the full 25-basis-point rate cut.
Meanwhile, Macquarie Bank has seen a 44 per cent increase in mortgages over the 12 months to March.
The bank’s Australian mortgage portfolio grew from $17 billion to $24.5 billion in the 12 months to 31 March 2015, while business lending increased by 27 per cent from $4.1 billion at 31 March 2014 to $5.2 billion at 31 March this year.
AMP Bank recorded a 1.5 per cent increase in mortgages in the first quarter of the year, with its financial planners driving a significant proportion of new settlements
AMP-aligned advisers contributed 26 per cent of AMP Bank's mortgage new business over the period.