Commonwealth Bank of Australia (ASX:CBA) reported unaudited statutory NPAT of about $2.5 billion for the quarter and unaudited cash NPAT of roughly $2.6 billion, up 1% on the 2H25 quarterly average and 2% on the prior comparable period.
Operating income rose 3%, supported by lending and deposit volume growth, higher non-interest income and the benefit of 1.5 additional days in the quarter. Headline net interest margin eased as strong growth in lower-yielding liquid assets and institutional repos diluted returns.
Net interest income was 3% higher, with the mix impact driven by a $12 billion lift in liquid assets—largely from a $10 billion increase in institutional deposits—and a $5 billion rise in institutional repos. Excluding these effects, underlying margin was slightly lower due to deposit switching, competitive pressures and a lower cash-rate backdrop.
"Many Australians have found the past four years challenging, particularly dealing with cost-of-living pressures. Households and businesses have felt some relief recently from lower interest rates. However, cost pressures remain and global issues continue to create uncertainty. We remain focused on supporting our customers, disciplined execution of our strategy, investing in technology to deliver exceptional customer experiences and delivering strong financial outcomes for our shareholders," CEO Matt Comyn said.
"We have maintained strong balance sheet settings. We remain conservatively positioned for the long term. CET1 remains well above the regulatory minimum. Strong provision coverage has been maintained. Deposit funding now represents 79% of total funding. We are well progressed on our FY26 funding requirements with A$16 billion in long-term wholesale funding raised to date. Our long-term conservative approach allows us to support our customers, lend to productive parts of the economy to help the nation prosper, provide strength and stability for the broader Australian economy, invest for the future and consistently deliver for our shareholders.
"Our solid operating performance and organic capital generation supported the payment of $4.4 billion in dividends in the quarter which benefited more than 800,000 shareholders directly and over 13 million Australians through their superannuation. We have purchased more than $640 million shares in the quarter to satisfy the 2H25 Dividend Reinvestment Plan.
We recognise cost-of-living pressures remain a challenge for many. Despite escalating geopolitical and macroeconomic uncertainty, we are optimistic on the outlook for the country. We are closely watching the increased competitive intensity and implications across the financial system, and we will continue to adjust our settings as appropriate. The Australian economy remains resilient. Economic growth is recovering and disposable income is rising for many households. We remain focused on our strategy to build a brighter future for all."
Retail momentum
Momentum strengthened across retail. The bank added more than 175,000 retail transaction accounts in the quarter, primarily from new-to-bank customers, alongside solid balance growth. Home lending increased by $9.3 billion, running at 1.1x system over the three months to September 2025, with proprietary channels accounting for 68% of new mortgage flows.
Household deposits expanded by $17.8 billion, or 1.2x system.
Business Banking also grew, with business transaction accounts up 7% year on year to around 1.36 million and lending expanding across sectors under a disciplined approach.
Rising costs
Costs rose 4% excluding restructuring and notable items, reflecting wage and IT vendor inflation and the extra 1.5 days, partially offset by seasonally lower IT vendor spend and ongoing productivity gains. Credit quality remained sound: loan impairment expense was $220 million with collective and individual provisions broadly flat, consumer arrears lower and corporate troublesome and non-performing exposures reduced.
Balance sheet settings stayed robust. The Level 2 CET1 ratio was 11.8%, aided by 33 basis points of organic capital generation prior to paying $4.4 billion in 2H25 dividends to more than 800,000 shareholders.
Liquidity and funding metrics remained strong, with a customer deposit funding ratio of 79%, LCR of 133% and NSFR of 116%, while the bank issued A$16 billion of new long-term wholesale funding year to date across markets and products.
Market punishes results
Shares fell 1.9% to $171.52 in early trade after the result.
Citi’s Thomas Strong said first-quarter earnings were largely in line with expectations and that the headline cash profit was perhaps marginally below consensus, highlighting higher costs linked to the recently settled New Zealand class action—ASB’s loan-disclosure case resolved last month for about $120 million. With limited additional disclosure versus peers, Citi expects minimal changes to forward earnings.