Commonwealth Bank of Australia’s first-quarter unaudited cash profit has fallen 5.7 per cent to $2.5 billion, with higher funding costs and competition for borrowers putting pressure on margins.
Cash earnings for the three months to September 30 fell from $2.65 billion a year ago, the bank said in a trading update ahead of Wednesday’s annual general meeting in Brisbane.
Home lending grew 3.1 per cent on an annualised basis, below system growth of 3.6 per cent.
Impaired assets rose to $6.6 billion from $6.1 billion the same time a year ago, with personal loan, credit card and mortgage arrears all ticking up.
Home loans 90 days or more overdue rose from 0.59 per cent a year ago to 0.67 per cent, although that was down from 0.70 per cent at the end of the last quarter.
But household deposits jumped 8.9 per cent in the quarter, while funds under administration and assets under management also rose.
“CBA continued to show resilient business performance in the first quarter of FY19,” chief executive Matt Comyn said in a statement.
“The fundamentals of our business remain strong, highlighted in this quarter by continued deposit growth, sound credit quality and balance sheet strength.”
CBA in August posted a 4.8 per cent drop in full-year profit to $9.23 billion, hit by a total of more than $1 billion in anti-money laundering fines, customer remediation and royal commission costs.
Since then, Westpac, National Australia Bank and ANZ have all posted lower than expected results as they grapple with cost of the damning findings of the banking royal commission.