Image source: Shutterstock

Highlights

  • CBA’s unaudited Q3 cash profit rose 6% year-on-year to $2.6 billion.

  • Growth driven by increased lending volumes and trading income, with net interest margins stable.

  • Operating expenses rose 1% due to investment in tech and frontline services; credit quality remains significant.

Commonwealth Bank of Australia (ASX:CBA), the nation's largest lender, has reported a 6% increase in unaudited cash profit for the third quarter ended 31 March, driven by higher lending volumes and encouraging trading income.

The bank delivered a $2.6 billion cash profit for the quarter, marking a year-on-year rise and in line with the quarterly average of the first half. Operating income rose 1%, supported by volume growth in home loans and household deposits, while operating expenses also edged up 1%, attributed to increased investment in technology infrastructure and frontline workforce expansion.

Net interest margins were stable, according to the bank, with net interest income benefitting from higher lending volumes and earnings from the replicating portfolio, though competitive pressure in deposit markets acted as a partial offset.

CBA noted "disciplined volume growth" across its core segments, including residential mortgages and deposit balances.

In terms of asset quality, loan impairment expense rose to $223 million, with both collective and individual provisions slightly higher than in previous periods. However, the bank reassured investors that portfolio credit quality remained robust, even with a rise in consumer arrears and corporate non-performing exposures.

Provisions held steady at 1.64%, indicating a stable risk outlook despite broader economic pressures and higher living costs facing Australian households.

While the results showed modest increases across most operational metrics, they also point to prudent cost control and investment focus, particularly in digital capabilities and customer service delivery.