Lending helps CBA to $2.65b quarter

COMMONWEALTH Bank has reported a $2.65 billion first-quarter profit, helped by increased home lending and household deposits.

Australia’s biggest bank said yesterday its unaudited cash profit for the three months to September 30 was six per cent higher than the average of each of the previous two quarters.

Home lending rose at an annualised 2.7 per cent compared to the previous three months, although CBA said growth was managed within Australian Prudential Regulation Authority limits on investor and interest-only mortgages.

Rate hikes for those mortgages helped net interest margin improve on the 2.11 per cent reported for the second half of the 2016/17 financial year, although CBA’s trading update did not say by how much.

The lender will give further details when it releases its firsthalf earnings on February 7.

Investors seemed to approve of the figures, sending CBA shares 0.9 per cent higher in the first 25 minutes of trade to $78.87 against the backdrop of a broadly negative market.

First-quarter statutory profit, which includes one-off costs, was $2.80 billion on an unaudited basis.

CBA, which reported a record $9.9 billion full-year cash profit in 2016/17, said operating income grew four per cent against the average of the previous two quarters.

Operating expenses also rose four per cent as CBA made provision for the estimated cost of regulatory actions and compliance programs, including those related to AUSTRAC’s allegations of anti money laundering and counter terrorism law breaches.