The bank’s unaudited statutory net profit for the quarter came in at $2.6 billion, which Commonwealth Bank said was supported by "income growth, continued cost discipline and sound credit quality".
Following the announcement, CBA's share price fell by 3.5 per cent by the close of trading on Tuesday – partly due to the expected announcement of a bank levy in the federal budget.
CBA said its 7.8 per cent growth in home lending for the 12 months to March 2017 “continued to be underpinned by strong proprietary channel performance”, but noted business lending growth remained “subdued” at 3.7 per cent.
“In wealth management, average assets under management and funds under administration rose by 6 per cent and 7 per cent respectively, reflecting stronger investment markets, partly offset by exchange rate movements,” the bank said.
Research house Morningstar said its view on Commonwealth Bank was unchanged despite the “softer-than-expected” cash profit for the third quarter, noting expectations were for a cash profit of $2.5 billion.
“Our base case assumptions are intact: we see credit growth slowing but remaining positive; loan quality remaining sound despite modestly higher loan losses as interest rates normalise; tight expense control supporting improved operational efficiency; higher regulatory capital requirements pressuring returns on equity; and dividend payout ratios moderating,” the company said.
Read more:
Levy would reduce bank profits by 4.5%
Budget poses admin headache for super funds
Moody’s gives budget a tick of approval
Australia has ‘furthest to go’ on climate change
KPMG acquires fintech matchmaking platform
