CBA's flat quarterly results fall short, for once

Australia's largest bank, Commonwealth Bank yesterday announced its unaudited March quarter results, disclosing cash earnings of approximately A$2.2 billion.

The results remain largely unchanged in comparison with the same period last year.

The bank's statutory net profit was also $2.2 billion, down from $2.3 billion during the same period last year.

In a statement to the ASX, CBA said expense growth was higher in the quarter, impacted by growing regulatory, compliance and remediation costs, including those associated with a number of legislative reforms.

Net interest margin continued to be impacted by competitive pressures. Expense growth was also higher in the quarter and home lending volume growth continued to track slightly below system, although credit quality remained sound, according to the bank.

The bank's troublesome and impaired assets continued to decline. In total, these assets declined 1.5 per cent from the prior quarter, a possible indication that the steady decline in bad debt charges is nearing an end.

"Credit quality remained sound. In the retail portfolios, home loan and credit card arrears were broadly flat, whilst seasonal factors contributed to higher personal loan arrears," the CBA statement noted.

The group's Basel III common equity tier 1 ratio - calculated in accordance with APRA's guidelines - was 8.7 per cent as at 31 March 2015, an increase of 20 basis points on the ratio as at December 2014, after excluding the impact of the 2015 interim dividend.

The group's Basel III internationally comparable CET1 ratio as at 31 March 2015 was 12.7 per cent (that is, the CBA's own recalculated ratio, which continues to be a contentious number).

Funding and liquidity positions remained strong. The proportion of the bank's funding task in March quarter 2015 that was met by customer deposits stood at 64 per cent, compared to 63 per cent in December quarter 2014. The group completed $8.5 billion of new term issuance in the quarter, with the average tenor of the wholesale funding portfolio at 3.9 years.

Liquid assets totalled $144 billion, with its liquidity coverage ratio standing at 122 per cent.