Commonwealth Bank (ASX:CBA) - CEO, Matt Comyn
CEO, Matt Comyn
Source: Mark Graham/Bloomberg
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  • Commonwealth Bank (CBA) is the latest of the Big Four to report a surge in quarterly profit thanks to Australia’s strong economic recovery
  • Cash net profit after tax for the third quarter of the 2021 financial year came to $2.4 billion — roughly double last year’s figure
  • An additional $3 billion in business loans were made over the three months to March 31 — equivalent to three times the average lending of other banks
  • Likewise, CBA reported lending an additional $1.4 billion in household deposits and an extra $6.7 billion in home lending
  • Commonwealth Bank is down 0.12 per cent to $94.47 per share

Commonwealth Bank (CBA) is the latest of the Big Four to report a surge in quarterly profit thanks to Australia’s strong economic recovery.

Cash net profit after tax for the third quarter of the 2021 financial year came to $2.4 billion — roughly double the $1.2 billion reported in the same period last year.

CBA said the stronger result reflected a general improvement in economic conditions combined with “strong operational performance focused on meeting the needs of customers.”

More specifically, that operational performance related to a substantial increase in business lending — an additional $3 billion over the three months to March 31. The volume is equivalent to three times the average lending of other banks and an eight per cent increase compared to last year.

Likewise, CBA reported lending an additional $1.4 billion in household deposits and an extra $6.7 billion in home lending.

“Credit quality across our lending portfolios remained sound,” said chief executive Matt Comyn.

“While it is pleasing to see that the vast majority of customers have smoothly transitioned from the bank’s COVID-19 temporary loan repayment deferral program as it concluded in March, we continue to offer ongoing assistance to those in need.”

CBA said the program played a key role in helping roughly 158,000 home loan and 83,000 business loan customers manage the challenges brought on by the COVID-19 pandemic.

Of those 158,000 home loan customers — representing around $54 billion — 81 per cent have returned to pre-deferral terms, 10 per cent are closed, four per cent have switched to interest-only arrangements and one per cent are either impaired or restructured. The remaining four per cent require ongoing assistance.

Business customers, on the other hand, have all concluded their deferral arrangements, with 95 per cent back to regular repayments.

The strong performance has culminated in an equally strong capital position for CBA, with a common equity tier 1 (CET1) ratio of 12.7 per cent — an increase of 10 basis points.

“A strong surplus capital position creates flexibility for the Board in its consideration of capital management initiatives,” CBA said in a statement this morning.

“The timing and extent of any such initiatives is dependent upon a continued trend of domestic economic improvement, our ongoing assessment of portfolio credit quality and regulatory guidance.”

Commonwealth Bank is down 0.12 per cent to $94.47 per share at 10:46 am AEST.

CBA by the numbers
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