Commonwealth Bank reports flat Q3 profit at $2.6b, CEO Matt Comyn flags high ‘risk to the global economy’

Commonwealth Bank has reported a quarterly profit of $2.6 billion, up 1 per cent on the previous quarter, and 6 per cent higher than the same time last year.

The bank’s revenue rose by one per cent over the quarter to $14.1b, largely driven by lending growth and higher trading income, while expenses grew one per cent to $6.37b. The bank said it also saw a slight uptick in impaired loans.

Commbank chief executive Matt Comyn described the quarter as “another challenging period for many Australian households and businesses dealing with cost-of-living pressures”, and said the bank was proactively engaging with customers facing hardship.

He also said the global turmoil could impact the country’s economic rebound.

“There is heightened risk to the global economy from geopolitical and macroeconomic uncertainty which could slow the domestic economy,” Mr Comyn said.

Commonwealth Bank’s lacklustre quarter follows equally uninspiring results from Westpac, NAB, and ANZ last week, when all three reported flat or soft earnings.

On Monday last week, Westpac revealed a one per cent fall in first-half net profit to $3.45b, excluding one-off items, with chief executive Anthony Miller describing geopolitical uncertainty as “a key risk that’s as high as it has been for a very long time”.

National Australia Bank showed a one per cent increase in cash earnings to $3.6b, with chief executive Andrew Irvine saying he was cautiously optimistic about the economy.

Like the other banks, Commonwealth Bank has been targeting business customers, and grew that segment 9.1 per cent or 1.3 times the system average. The company grew its business base by 7 per cent over the quarter to 1.3 million accounts.

Home lending showed more moderate expansion, with the bank writing $6b in loans to be 4 per cent on the previous quarter, although home loans grew slightly slower than the broader market.

After a period of decline in arrears, Commbank has seen a tick back up in impairment, with “non-performing” and “troublesome’ corporate loans growing to $6.6b from $6.2b last quarter. Home loan arrears were five basis points higher over the quarter to 0.71 per cent, although they remain broadly in line with arrears pre-COVID.

But Mr Comyn said the bank was focused on maintaining strong capital ratios, and was taking a long-term conservative approach to its balance sheet.

Mr Comyn said he was confident that Australia would navigate the global turmoil.

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CBA shares were 0.7 per cent higher to $167.29 on a day of mostly positive trading for the Big Four.