Weekly application volumes trended lower over March, April and May “relative to the peak volumes experienced in February,” Commonwealth Bank said in a trading update yesterday.
On the other hand the bank said “application volumes remain strong and are around 10 per cent higher than the same period last year,” perhaps confounding assumptions.
“This is due to continued strong operational performance in our credit decisioning turnaround times, together with stronger customer demand for home loan refinancing in a low rate environment,” the bank said.
“Household deposits growth remained strong through the quarter and into April, influenced by reduced consumer spending and the first stages of government stimulus payments.
Earnings at the bank took a hit from the inevitable pandemic provision. CBA said its cash profit and also statutory profit for the March 2020 quarter was around A$1.3 billion, or about $1 billion less than the quarterly average for the December 2019 half year.
The COVID-19 provision was $1.5 billion pre-tax.
Reputation matters continue to cost the group with additional customer remediation provisions of $135 million, and thus “headline operating expenses” were up five per cent.
“Net interest income was flat, with strong volume growth in core markets offset by lower margins.”
The bank did not delve into the sensitive topic of how it might approach the final dividend when its reports for the full year in three months’ time.