The bounce-back of the Australian economy from the pandemic is playing to Commonwealth Bank’s strengths, while its program of divestments of non-banking businesses leaves the bank flush with capital.

CBA’s trading update for the March 2021 quarter, released yesterday, shows a cash net profit of around A$2.4 billion, double the profit for the banks third quarter in FY2020, and $500 million ahead of the average quarterly profit for the first six months of this financial year.

The bank had plenty to brag about, with a total capital ratio (on the APRA basis) of 19.4 per cent at the end of March, 160 bps more than the average capital ratio for major banks at the end of December.

“The bank’s franchise strength was again evident with above system growth in home loans supported by strong funding volumes and continued focus on credit decisioning turnaround times,” the bank wrote in the update.

“Domestic business lending continued to grow at more than three times system, with diversified growth across sectors,” an interesting comment given the feeble conditions still in some parts of the economy.

Household deposits growth was also above system, growing by $4 billion in the quarter, and CommBank says it is 75 per cent deposit funded.

The bank’s use of the Term Funding Facility stands at $48 billion, up from $41 billion in December 2020, “driven by continued strong SME lending growth” the bank said.

CBA said the Bank “is well positioned from a wholesale funding perspective, with 68 per cent of wholesale funding now long term and a weighted average tenor of 5.6 years”.