CBA heading towards record profit for 2015

Yesterday, in order to provide a degree of comparability across all Big Four banks, the CBA released its unaudited result for the quarter to 30 September this year.

The bank disclosed cash earnings for the three months ended 30 September 2014 of approximately A$2.3 billion, up from $2.1 billion the same quarter last year. Statutory net profit on an unaudited basis for the same period was approximately $2.4 billion.

CBA asserted that: "Revenue growth and continued cost discipline resulted in positive 'jaws' being maintained," although group net interest margin was slightly lower, while improved wholesale funding costs were more than offset by competitive pricing impacts.

In home lending, strong new business levels were balanced by higher repayments as borrowers took advantage of continuing low interest rates.

Household deposit growth continued in the quarter, with the Group growing slightly ahead of system. In its wealth management business, 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.

As has been the pattern for several years now, impaired assets were lower at $3.1 billion. Total loan impairment expense was $198 million in the quarter, 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 ratio as at 30 September 2014 was 8.6 per cent, down from 9.3 per cent at 30 June 2014 as the coffers were slightly drained by the bank's 2014 final dividend payment, , which included the on-market purchase of shares in respect of the Dividend Reinvestment Plan, as well as growth in Risk Weighted Assets.

The Group's Basel III Internationally Comparable Common Equity Tier 1 ratio as at 30 September 2014 was 12.9 per cent. In October 2014 the Group issued A$3.0 billion of Tier 1 CommBank PERLS VII Capital Notes, the largest hybrid capital issuance ever completed in the Australian market.

CBA also completed a buy-back of A$2.0 billion PERLS V Tier 1 capital securities.