The Commonwealth Bank yesterday released its unaudited third quarter trading update - that is, for the quarter ended 31 March 2018.In a departure from its approach in reporting 3Q17 results, CBA chose to compare the results to the average of the two quarters of the first half of FY18. Highlights from the brief report, as published, were: unaudited statutory net profit of approximately $2.30 billion (down from $2.4 billion in comparable period for 2017); unaudited cash net profit of approximately $2.35 billion in the quarter (down from $2.6 billion in Q17); CET1 (APRA) ratio at 10.1 per cent, up 37 basis points since Dec 2017, and after allowing for payment of the 2018 interim dividend; and $375 million expense provision for fines when the case brought by Austrac is settled.A notable balance sheet feature was that the group's long term wholesale funding tenor moved out to 5.1 years.Underlying operating income decreased by four per cent. CBA explained this with the observation that "that volume growth was offset by a slight decline in group net interest margin due to customers switching from interest only to principal and interest home loans, as well as higher basis risk." Other banking income was lower driven by lower treasury and trading performance, and seasonally lower card fee income, the bank said. Underlying operating expense increased by three per cent, due to increased provisions for regulatory and compliance project spend.Consumer arrears were seasonally higher in the quarter. "There has been an uptick in home loan arrears, influenced by a small number of customers experiencing difficulties with rising essential costs and limited income growth," CBA's commentary noted.Troublesome and impaired assets increased by approximately $600 million to $6.6 billion, all of which can be explained as an increase in the troublesome corporate exposures, with impaired assets stable. The Net Stable Funding Ratio (NSFR) was 111 per cent at March 2018, up from 110 per cent at December 2017. The Liquidity Coverage Ratio (LCR) increased to 133 per cent as at March 2018, driven by higher liquid assets (up approximately $5 billion in the quarter to $144 billion.The group's Leverage Ratio was 5.2 per cent on an APRA basis and 5.9 per cent on an internationally comparable basis, 20 basis points lower than December 2017, primarily reflecting the impact of the 2018 interim dividend.Also worth noting is that the Group will adopt AASB 9 on 1 July 2018. The impact will be recognised in opening retained earnings.The group's estimate of the pro-forma impact of AASB 9 as at 1 January 2018 is an increase in collective provisions of approximately $1,050 million (before tax) and a consequent reduction in the CET1 ratio of approximately 26 bps.On 1 May 2018, APRA released the findings of the Prudential Inquiry into CBA. APRA requires CBA to increase Operational Risk regulatory capital by $1 billion (RWA of $12.5 billion). This adjustment is effective 30 April 2018, being the date the Group entered into an enforceable undertaking with APRA, which states that CBA