Commonwealth Bank of Australia said its unaudited cash net profit was A$2.8 billion in the three months through September, up 8% on a year earlier and matching its statutory profit for the period. The bank said cash earnings were flat on the quarterly average for the final six months of the 2026 fiscal year.
Business lending rose 13.6% from a year earlier, ahead of growth of 7.7% in deposits and 6.6% in home lending. "Business lending growth was well-diversified across a range of sectors, supported by the strength of our proprietary customer relationships and continued business investment demand," chief executive Matt Comyn said.
COSTS AND CREDIT
Operating income rose 3%, with higher net interest income partly offset by lower other operating income. Operating expenses also rose 3%, which management attributed mainly to rising labour costs and IT vendor inflation, along with higher cloud-computing volumes and software licensing.
The bank booked a loan impairment expense of A$300 million and said collective provisions rose by A$105 million, although it said credit quality remains sound. Total provisions were flat at A$6.5 billion, as higher collective provisions, mainly reflecting lower house prices in the mortgage portfolio, were offset by lower individual provisions for corporate exposures.
Home loan arrears rose by 7 basis points to 0.80%, reflecting cost-of-living pressures from higher inflation and interest rates. Personal loan arrears eased modestly to 1.66%, while credit card arrears were flat at 0.73%.
A CONCENTRATED MARKET UNDER RATE PRESSURE
Australia's banking system is highly concentrated. Of 89 licensed banks at June 2026, the four majors, Commonwealth Bank, Westpac, National Australia Bank and ANZ, held A$5.13 trillion of assets, about 73% of the banking total.
Australian banks are trying to protect profits while consumers and borrowers face more pressure on their budgets, after the Reserve Bank of Australia raised interest rates five times this year to tame inflation. "While economic growth is slowing, the Australian economy remains resilient, supported by low unemployment and a strong public infrastructure and private investment pipeline," Mr Comyn said.
CAPITAL AND FUNDING
The underlying net interest margin was broadly stable in the quarter, the bank said, while its CET1 ratio improved by 36 basis points to 11.5% before the payout of dividends to shareholders.
Commonwealth Bank raised A$14 billion of new long-term wholesale funding this financial year. It also paid A$4.5 billion in dividends to shareholders. Its share price was unchanged at A$168.99 after the announcement.
THE TGB VIEW
Commonwealth Bank ranks 44th in the TGB Bank Rankings and 17th in Asia-Pacific, and its 12.8% return on equity is the highest of the four majors on the latest annual figures in the table, ahead of National Australia Bank at 10.7%, Westpac at 9.5% and ANZ at 8.3%. This quarter's growth came from volume, with business lending up 13.6%, while operating expenses rose 3%. Credit is the counterweight: home loan arrears rose 7 basis points to 0.80% and lower house prices lifted collective provisions.
Related: Commonwealth Bank of Australia FY26 cash profit rises 7% to A$11 billion; ROE rises to 14%
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