Commonwealth Bank Reports Profit Growth Amid Economic Recovery

Commonwealth Bank of Australia (CBA), the nation’s largest lender, reported a slight rise in first-half profit, driven by economic recovery and a significant drop in loan impairment charges. The bank’s shares hit a record high following the announcement.

CBA’s cash net profit increased 2% to A$5.1 billion ($3.2 billion) for the six months ending December, slightly surpassing market expectations. The 23% decline in loan impairment charges provided a crucial boost, as profits would have remained nearly flat otherwise. Despite ongoing cost-of-living challenges, the bank noted a 15% drop in loan hardship cases, with most borrowers staying ahead on repayments.

CEO Matt Comyn anticipates Australia will begin an easing cycle in 2025, mirroring global economies. This, he believes, will alleviate financial pressure on households and bolster business confidence.

CBA declared its highest-ever interim dividend of A$2.25 per share, up from A$2.15 a year ago. The bank’s shares surged 1% to an intraday high of A$164.71, extending a strong rally that has made it Australia’s largest company by market capitalization. The broader market edged up 0.2%.

Despite the positive results, Citi analysts noted that the performance aligned with market expectations and did not necessarily justify the recent share price surge.

CBA, which controls a quarter of Australia’s A$2.2 trillion mortgage market, saw a 6% rise in costs as it invested in technology and AI infrastructure. The lender’s net interest margin improved by 2 basis points to 2.08%.

With rising wages and tax cuts boosting savings and spending, CBA remains optimistic about economic resilience despite inflationary pressures.