High interest rates are doing the job of bringing inflation under control, but the pace of that reduction has slowed, leaving many Australians still challenged by cost of living pressures, Commonwealth Bank CEO Matt Comyn said today (Wednesday 13 November).
Speaking as CBA provided its latest quarterly trading update to shareholders, Mr Comyn underscored that the bank’s priority remained supporting its customers at the same time as investing in its franchise and providing strength and stability for the Australian economy.
“Inflation is moderating but at a slowing pace and global geopolitical tensions are creating uncertainty,” he said. “Growth in the Australian economy remains slow as higher rates continue to weigh on consumer demand and bring inflation back to the target range [of between 2 per cent and 3 per cent].”
While underlining the current challenges, Mr Comyn struck an optimistic tone about the overall economic outlook, saying the “Australian economy remains fundamentally sound”.
“We remain focused on supporting our customers, investing for the future, generating sustainable returns for our shareholders and providing strength and stability for the broader economy to achieve a brighter future for all.”
His comments came as CBA announced an unaudited cash net profit after tax of ~$2.5 billion for the first quarter of the 2025 financial year, covering the period between July 1, 2024 to 30 September 2024. That was flat on the corresponding period a year ago.
That was struck on operating income up 3.5 per cent on the quarterly average at the end of the second half of the 2024 financial year and against a 1 per cent increase in operating expenses. Operating performance, which is measured by operating income less operating expenses, was up 1 per cent on the prior corresponding period in 2024.
The increase in operating income was supported by improved momentum in volume growth across home lending and household deposits. CBA also grew its business bank during the quarter, in both lending – an extra $2.1 billion - and the number of business transaction accounts increased, by around 29,000, taking the total number to over 1.27 million accounts.
CBA increased home loans by +$8.6 billion over the period with a continued focus on retaining existing customers and an improvement in acquiring new customers in a highly competitive market. Household deposits grew $14.9 billion in the quarter, in line with the market.
While cost of living pressures remain challenging, consumer arrears - based on a 90-plus day arrears rate for home loans, personal loans and credit card levels – were favourably impacted by seasonal trends over the quarter. Arrears were also helped by higher average tax refunds to customers and changes to income tax rates and thresholds.
Troublesome and impaired assets were marginally higher at $8.8 billion, around $100 million up on the end of June 2024, representing 0.63 per cent of total committed exposures. This number remains well below the historic average.
The group maintained its strong capital position with its Common Equity Tier 1 (Level 2) ratio of 11.8 per cent at 30 September 2024, well above the prudential regulator’s minimum regulatory requirement of 10.25 per cent.
During the quarter CBA paid out $4.2 billion from its second half profit of 2024 financial year in dividends to 830,000 shareholders. The dividend was paid on 27 September.
The bank also purchased more than $750 million of shares on the stock market to neutralise the impact of the 2H24 Dividend Reinvestment Plan.
