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- Net profit up by seven per cent
- Pre-provision profit climbs by six per cent
- 14 per cent increase in return on equity
- But local growth slowing as costs rise
The Commonwealth Bank of Australia (ASX:CBA) has warned that local growth is slowing, with higher interest rates and inflation placing uneven pressure on household incomes and economic activity.
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Most notably, housing activity has softened from a high base, CEO, Matt Comyn, noted in the CBA’s latest “Outlook”.
Releasing its FY26 result, the CBA reported a seven per cent increase in cash net profit after tax to $11 billion, a six per cent pre-provision profit rise to $16.5 billion and a 14 per cent increase in return on equity
Mr Comyn said operating income increased six per cent, supported by customer and volume growth and a broadly stable underlying net interest margin.
“In FY26, CBA grew at or above system in each of our five core domestic product categories: home lending, business lending, consumer finance, household deposits and business deposits,” he said.
“It is the first time CBA has achieved this and the first time any major Australian bank has done so in the past 15 years. We remain the main financial institution for one in three Australians and one in four Australian businesses.”
Growth remained broad across home lending, business lending and customer deposits, supported by stronger transaction relationships.
“We continued to invest in customer service, technology, operational resilience and productivity. Investment spend increased six per cent to $2.4 billion.
“The franchise continued to grow through the second half despite competition. Loan impairment expense increased from low levels and arrears rose in some consumer portfolios, while realised credit losses remained low, overall credit quality remained sound and provision coverage remained strong,” Mr Comyn said.
The CBA board has determined a final dividend of $2.70 per share, fully franked, taking the bank’s dividend for the full year to $5.05 per share.
In the bank’s “Outlook” forecast, Mr Comyn noted that the Australian economy has remained resilient, supported by historically low unemployment and longer-term investment.
However, application volumes appear to have stabilised in recent weeks.
“Businesses continue to manage higher input costs and supply uncertainty. CBA enters FY27 with leading customer relationships, a broader franchise and a strong balance sheet.
“Our priorities are to deepen primary customer relationships, maintain discipline in our volume and margin choices, improve productivity, and deliver measurable customer, risk and financial benefits from our investments. Our capital, funding and liquidity positions provide flexibility and resilience as conditions evolve.”
CBA was steady at $173.90 with a Mkt cap of $290.8B prior to markets opening.
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