Key Highlights

  • Commonwealth Bank of Australia (ASX:CBA) reported FY26 cash net profit after tax of $10.982 billion, up 7% from FY25.
  • Pre-provision profit increased 6% to $16.469 billion, while Return on Equity rose 50 basis points to 14.0%.
  • The Board declared a fully franked final Dividend of $2.70 per share, taking the full-year dividend to $5.05 per share.
  • CBA increased Investment spending by 6% to $2.428 billion, with technology, Fraud prevention, financial crime controls and AI capabilities among the key areas of expenditure.

Commonwealth Bank of Australia (ASX:CBA) reported higher Earnings for the financial year ended 30 June 2026, with cash net profit after tax increasing 7% to $10.982 billion. Statutory net profit after tax was $10.911 billion, representing an 8% increase from FY25. The result was supported by lending Volume growth across core domestic businesses and a broadly stable underlying net interest margin.

Operating income increased 6%, reflecting customer and volume growth. The bank reported growth at or above system levels across its five core domestic product categories: home lending, Business lending, consumer finance, household deposits and business deposits.

CBA said it was the first time it had achieved growth at or above system levels across all five categories and noted that the outcome represented the first such result among major Australian banks in 15 years.

Pre-Provision Profit and Operating Costs

Pre-provision profit increased 6% to $16.469 billion, reflecting performance across CBA's domestic businesses. Operating expenses, however, also increased 6% to $13.755 billion, with the cost-to-income ratio reported at 45.5%.

The increase in expenses reflected Inflation as well as continued expenditure on technology, fraud, scams and financial crime. These factors were partly offset by productivity initiatives and favourable foreign exchange movements.

Investment spending reached $2.428 billion, 6% higher than in FY25. CBA continued to allocate Capital towards technology infrastructure, modernisation and artificial intelligence capabilities. The bank expects investment spending to remain at approximately $2.4 billion in FY27.

Net Interest Margin and Credit Quality

The reported net interest margin was 2.05%, three basis points higher than FY25 and two basis points above the first half. CBA said underlying margins benefited from higher earnings on its replicating portfolio and capital hedges, together with the mix associated with growth in business lending and deposits. These benefits were largely offset by lower lending margins.

Loan Impairment expense increased 9% to $788 million, with the Loan loss rate at 8 basis points. CBA attributed the increase primarily to portfolio growth, cost-of-living pressures, geopolitical risks and broader macroeconomic uncertainty.

Home loan arrears increased to 0.73%, while personal loan arrears reached 1.72%. The bank reported provision coverage of 1.53% of credit risk-weighted Assets and said it carried a $2.7 billion buffer relative to losses expected under its central economic scenario.

Capital, Funding and Shareholder Returns

CBA's Common Equity Tier 1 capital ratio was 12.0% at the APRA Level 2 level, compared with the regulatory minimum of 10.25%. The international CET1 ratio was 18.3%.

The bank reported a 14.0% return on equity, an increase of 50 basis points from FY25. During the year, CBA deployed 72 basis points of capital into credit risk-weighted assets, including allocations associated with commercial lending and domestic residential mortgages.

The Board declared a final dividend of $2.70 per share, fully franked, bringing the FY26 full-year dividend to $5.05 per share, up 4% from the previous year. The Payout Ratio was 77% of cash NPAT, within CBA's stated target range of 70% to 80%.

The existing $1 billion on-market share buy-back, of which $300 million had been completed, expired on 12 August 2026 and was not extended.

FY27 Priorities and Economic Conditions

CBA said the Australian economy remained supported by historically low Unemployment and longer-term investment, although economic growth was slowing. Higher interest rates and inflation continued to place varying degrees of pressure on household incomes and economic activity.

Housing activity had softened from elevated levels, while application volumes had stabilised in recent weeks. Businesses continued to face higher input costs and Supply uncertainty.

For FY27, CBA identified priorities including deepening primary customer relationships, maintaining discipline around lending volumes and margins, improving productivity and generating measurable customer, risk and financial benefits from investment programs. The bank also highlighted its capital, funding and Liquidity positions as providing flexibility as economic conditions change.

Customer, Technology and Community Initiatives

During FY26, CBA provided more than 147,000 tailored payment arrangements to customers requiring financial support and helped customers purchase more than 150,000 homes. It also invested $140 million in its Customer Service network.

More than $1 billion was invested in measures designed to protect customers against fraud, scams, cyber threats and financial crime. CBA developed AI-powered cyber defence agents and reported approximately 40,000 daily fraud alerts, alongside more than 5.9 million intelligent first-time payment warnings.

The bank also provided $50 billion in funding to businesses and launched a national artificial intelligence, Cybersecurity and digital capability initiative with OpenAI aimed at one million small businesses.

Conclusion

Commonwealth Bank's FY26 results showed higher cash earnings, increased pre-provision profit and an improved return on equity, alongside continued growth across its principal domestic lending and deposit categories. The bank increased technology and risk-related investment while also reporting higher loan impairment expenses and selected increases in arrears. CBA enters FY27 with its stated priorities centred on customer relationships, productivity, disciplined volume and margin management, and extracting measurable outcomes from its investment programs.