The CBA advised that its unaudited cash earnings for the three months ended 30 September 2014 were approximately $2.3 billion. Statutory net profit on an unaudited basis for the same period was approximately $2.4 billion, with non – cash items treated on a consistent basis to prior periods.
Overall business momentum was maintained. In home lending, focus remains on profitable growth in a competitive market, with strong new business levels balanced by higher repayment activity in a low interest rate environment. In commercial lending, system credit growth remained subdued, with the Group growing relatively strongly in priority markets. Household deposit growth continued in the quarter, with the Group growing slightly ahead of system. In Wealth Management, net flows,
investment performance and FX impacts contributed to Assets under Management growing by 3.5 per cent over the three months, notwithstanding equity markets ending the quarter lower. Insurance inforce premiums increased by 2 per cent.
Credit quality remained sound, with retail arrears flat to slightly improved and impaired assets lower at $3.1 billion. Total loan impairment expense was $198 million in the quarter (that’s around 13 basis points of the loan book), with strong provisioning levels maintained and the economic overlay unchanged.
Funding and liquidity positions remained strong, with liquid assets of $145 billion, customer deposit funding at 63 per cent and the average tenor of the wholesale funding portfolio at 3.8 years. The Group completed $12 billion of new term issuance in the quarter.
The Group’s Basel III CET1 (APRA) ratio as at 30 September 2014 was 8.6 per cent, down from 9.3 per cent at 30 June 2014. The Group’s Basel III Internationally Comparable Common Equity Tier 1 (CET1) ratio as at 30 September 2014 was 12.9 per cent.
Like the other banks, margins are under some pressure, thanks to a fall in funding costs being more than offset by competitive pricing.
The data shows CBA’s strong position and franchise, and they are well positioned to handle any change in capital rules, or other factors. We believe they are also best positioned with regards to the transition to digital channels.
