Commonwealth Bank achieved good volume growth in home and business lending during the March quarter but net interest income was down, as margin compression from higher swap rates and price competition took their toll.
The bank reported net profit of A$2.3 billion in the March quarter, which was 2 per cent below profit in the March quarter last year but unchanged compared with the previous two quarters.
Home loan balances were up $6.9 billion during the quarter, with growth in line with system. Business loan growth of around $3 billion in the quarter was 1.3 times system.
Net interest income fell 2 per cent. Operating income less operating expenses was up 2 per cent compared with the previous corresponding period but in line with the two previous quarters.
The bank said it made a call to “lead the market” on fixed home loan interest rate increases in response to rising swap rates and this had a “softening impact” on new lending volumes.
Fixed rate home loans as a proportion of new fundings fell from 47 per cent in the December half last year to 27 per cent in the March quarter.