The Commonwealth Bank of Australia has joined its peers in reporting weak returns in its latest report.
But that didn’t worry investors who sent the shares higher on the day.
The country’s biggest bank said on Wednesday that its September quarter cash profit was down 16% on the same quarter of 2019-20, thanks to the continuing impact of COVID.
That was a much stronger performance than the 33% slump in cash profit in the six months to June 30 which helped push full-year cash earnings down 11.3%.
Helping with the slower rate of fall in the quarter was a jump in home and business lending.
The CBA reported that home lending was up $5.6 billion in the quarter and business lending up $1.4 billion.
CBA reported an unaudited cash profit of $1.8 billion for the three months ended September 30, down from $2.2 billion the same period last year, the bank said in a trading update to investors on Wednesday morning.
Profits were impacted by higher investments and spending on staff as they used less annual leave and the bank had to increase staffing levels in customer support areas because of changes brought about by COVID 19, social distancing, and the various lockdowns.
CBA CEO Matt Comyn said the bank was “well placed and committed” to provide ongoing support to customers struggling with the economic fallout of the pandemic.
“Our strong balance sheet, focus on operational excellence and the dedication and commitment of our people ensures we remain well placed to support our customers and the wider community through the ongoing challenges of COVID-19,” he said.
CBA reported 73% of customers on deferred mortgages had returned to full payments, 23% required an extension, 4% required further assistance and less than one percent of the loans were impaired.
“We continue to contact customers with a range of options as they approach the end of temporary loan repayment deferral periods, and have been encouraged by the number of customers who have been able to return to making repayments on their loans,” Mr Comyn said.
CBA shares jumped 2.7% to $74.40 as investors reacted favourably to the update.
