CBA shares take tumble

of performance – but said it fell slightly in the three months to March 31. It already slipped 0.04 percentage points to 2.11 per cent in the first half, when CBA made a record cash profit of $4.9 billion.

“While we are cautious not to extrapolate quarters, especially given the March quarter is often soft, the underlying result was a bit weaker than we expected,” UBS banking analyst Jon Mott said.

Investors appeared troubled by reports Treasurer Scott Morrison is poised to unveil a new tax on banks’ sheet liabilities.

CBA shares fell $3.28 to $82.02 – their biggest one-day fall since August 2015. Westpac also fell almost 4 per cent, while ANZ and National Australia Bank each fell 2.6 per cent and 2 per cent respectively.

“Full valuations have preempted a benign macro scenario of ongoing moderate growth, and markets appear to need good news to hold them around current valuations,” CMC Markets chief market analyst Ric Spooner said. balance

“The market is likely to be nervous about this prospect until they get details of what might be involved and what capacity of banks might have to pass this cost to customers.”

CBA’s tier one capital ratio of 9.6 per cent also was lower than the market had anticipated, optionsXpress market analyst Ben Le Brun said.

Unaudited cash earnings were up from $2.3 billion in the prior corresponding period, while net profit for the period increased from $2.4 billion to $2.6 billion.

CBA said increased home loan lending had helped offset some pressure on margins, growing at an above-system annual rate of 7.8 per cent.

“In the home lending portfolio, investment lending reduced as a proportion of total new lending in the quarter and new interest-only lending is being closely managed,” CBA said in the trading update issued to the ASX.

The Australian Prudential Regulation Authority has told lenders to limit growth in higher-risk interest-only loans to 30 per cent of new mortgages, and limits annual growth in investor lending to 10 per cent.

CBA’s troublesome and impaired assets were essentially flat for a third straight quarter, at $6.7 billion. Within that, its exposure to domestic apartment developments was less than $20 million.

The bank’s charge for bad and doubtful debts dropped to $202 million, or 0.11 per cent of gross loans and acceptances – down from 0.17 in the first half. It had been $427 million in the prior corresponding period.