CBA -1.21%: delivered a solid first-quarter trading update, with strong business lending and deposit growth helping offset softer mortgage activity. While cash profit was flat against the average quarterly result in 2H26, margins remained broadly stable.
1Q results (unaudited):
- Cash NPAT was approximately $2.8bn, up 8% year-on-year but flat against the 2H26 quarterly average.
- Net interest income increased 4%, with underlying net interest margin stable.
- Business lending grew 13.6%, while home lending increased 6.6%.
- Home loan applications remained 16% lower year-on-year, reflecting softer housing activity.
- Operating expenses rose 3%, while loan impairment expense was $300m and collective provisions increased by $105m.
- CET1 capital remained solid at 11.5%, with deposits representing 79% of total funding.
The result highlights the strength of its business banking franchise, with lending growth and stable margins helping offset the weaker mortgage market. While rising expenses and higher collective provisions warrant attention, credit quality remains relatively sound, and we see scope for management to drive further efficiencies through cost reductions, outsourcing and the adoption of AI to lift productivity over time. With earnings proving resilient despite a tougher economic backdrop, we remain positive, although the outlook for household credit quality and housing activity will be important to watch.
MM remains cautiously bullish CBA
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