The Commonwealth Bank posted a 6% rise in cash earnings to $2.65 billion in the September quarter compared to the average of each of the previous two quarters.
The unaudited numbers for the three months show statutory net profit at $2.80 billion.
Operating income grew 4% and expenses also grew 4%.
But margins improved and the level of bad loans fell.
“The credit quality of the Group’s lending portfolios remained sound,” the bank says.
The Loan Impairment Expense of $198 million in the quarter was 11 basis points of Gross Loans and Acceptances, compared to 15 basis points in the 2017 financial year.
“Consumer arrears were seasonally lower but continued to be elevated in Western Australia,” the bank says.
Home lending increased 2.7% but business lending fell 1%, as this chart shows:
The bank posted a 4.6% increase in cash profit to $9.88 billion for the 2017 financial year.