Key Highlights

  • Unaudited Q1 FY27 cash profit was approximately AUD 2.8 billion, up 8% year on year.
  • Loan Impairment expense increased to AUD 300 million from the second-half FY26 quarterly average of AUD 234 million.
  • Home Loan arrears rose seven basis points to 0.80%.
  • Business lending grew 13.6% and home lending 6.6% over 12 months, with a CET1 ratio of 11.5%.

Commonwealth Bank of Australia (ASX:CBA) provides banking and financial services to households and businesses across Australia. On 11 November 2026, the bank released its trading update for the three months ended 30 September 2026.

First-Quarter FY27 Earnings

It reported unaudited cash profit of approximately AUD 2.8 billion, an increase of 8% from the prior corresponding period. However, the result was broadly flat compared with the average quarter in the second half of FY26. The comparison indicates year-on-year growth without a comparable sequential increase.

Loan Impairments and Mortgage Arrears

Credit quality was a notable feature of the update. Loan impairment expense reached AUD 300 million for the quarter, compared with an average of AUD 234 million per quarter during the second half of FY26. Home loan arrears increased by seven basis points to 0.80%. The supplied material attributes the change partly to household cost pressures and slower resolution of overdue accounts. Higher arrears do not necessarily translate into equivalent Credit losses, but they are an indicator of repayment stress and may influence future provisioning.

Lending, Deposits and Capital

The bank reported Business lending growth of 13.6% and home lending growth of 6.6% over the preceding 12 months. Household deposits increased 7.7%, while Operating Income grew 3%. The net interest Margin was described as broadly stable. Customer deposits represented 79% of total funding, and the common Equity tier 1 Capital ratio stood at 11.5%. These figures provide context for the bank’s lending activity, funding structure and regulatory capital position. Loan growth and deposit growth should be considered alongside changes in funding costs and credit quality.

Key Risks and Upcoming Indicators

The next reporting periods will help establish whether the increase in mortgage arrears is temporary or persists. Important measures include impairment expense, overdue housing loans, net interest margin, lending volumes and deposit funding. Broader housing-credit conditions and household repayment capacity may affect performance, but the supplied material does not establish a direct forecast for future losses. The Q1 FY27 update therefore presents a combination of higher annual profit and lending growth with increased credit costs.

Key Insights

CBA reported higher year-on-year cash profit in Q1 FY27, but credit impairment expense and mortgage arrears also increased. The balance between lending growth, funding conditions and asset quality will remain important in subsequent updates.