- CBA reports September quarter unaudited cash net profit of $2.5 billion, down 5.6%.
- Operating income up 1%.
- Net Interest Margin lower due to higher funding costs.
The Commonwealth Bank’s profit dipped again in the first quarter of the 2019 financial year.
Cash profit fell by 5.6% to $2.5 billion compared to the $2.65 billion of the same quarter a year ago, according to unaudited numbers released ahead of the bank’s annual general meeting in Brisbane today.
The fall compares to the full year 4.8% drop in cash profit to $9.23 billion reported in August.
Unaudited statutory net profit was $2.45 billion in the three months to September.
Operating income was up 1%, with higher other banking income offsetting flat net interest income dragged down by higher funding costs.
Loan impairment expenses of $216 million represented 11 basis points of gross loans and acceptances, compared to 15 basis points in the 2018 financial year.
Home lending was up 3.1% but business loans fell 4.2% in the quarter.
CBA says the September quarter cash profit is 11% better than $2.237 billion, the average of the last two quarters of 2018.
The numbers for the September quarter which CBA has compared to the quarterly average of the second half of 2018:
CEO Matt Comyn says the bank continued to show resilient business performance in the first quarter.
“The fundamentals of our business remain strong, highlighted in this quarter by continued deposit growth, sound credit quality and balance sheet strength,” he says.
The bank, along with the other three major Australian banks, has been dealing with the fallout of the financial services royal commission and paying out compensation to customers.
Profits have been squeezed by fines for poor behaviour and by the costs of responding to inquiries including the financial services royal commission.
The full year 2018 results recorded a combined total of $389 million in additional provisions, including risk and compliance of $234 million and one-off regulatory costs of $155 million.
This is on top of the $700 million paid to settle civil penalty proceedings for contraventions of the Anti-Money Laundering and Counter-Terrorism Financing Act.