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Commonwealth Bank (ASX:CBA) has dipped over -4% on Tuesday in morning trades as the company’s latest earnings update reflects that the “Mag Two” finance constituent has seen its Net Interest Margin (NIM) decline quarter-on-quarter.
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While profits after tax stayed flat (or increased 1% to “around $2.5 billion”), the company confirmed “headline net interest margin has reduced due to the mix effects of strong growth in lower-yielding liquid assets and institutional repos.”
Operating expenses also increased +4% in the quarter, “due to wage and IT vendor inflation and 1.5 additional days in the quarter,” but noted some reduced spend in the IT department. Loan impairments of $220 million also stand on the books, but for CBA, that’s neither here nor there.
“Retail transaction accounts increased by more than 175,000 in the quarter, primarily driven by new-to-bank account openings… [and] home loans grew $9.3 billion at 1.1x system for the three months to September 2025.”
Notably, home loan arrears declined -4bps over the quarter, which the bank reported being the result of interest rate cuts from the RBA.
“Total credit provisions were broadly flat at $6.4 billion, reflecting a cautious approach to provisioning given increasing geopolitical tensions and global macro uncertainty,” Commonwealth wrote.
CBA last traded at $167.43/sh through to lunchtime.
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