‘Fundamentally sound’: CBA’s upbeat about Australian economy after Big 4 bank posts $2.5bn first quarter profit

Commonwealth Bank Australia has posted a mammoth profit for the first quarter of the 2025 Financial Year – saying the economy is “fundamentally sound” despite cost of living pressures on customers.

For the first quarter of FY 2025, the bank reported a $2.5bn profit, which marked a 3.5 per cent increase in operating income.

This was driven by one additional day in the quarter, profitable volume growth across core lending and deposit products, and the timing of dividends received from minority investments.

CBA’s retail bank saw growth in transaction accounts up by 121,000 and an increase in home loans by $8.6bn over the period, as the bank says it is focused on retaining existing customers and gaining new ones in a highly competitive market.

Household deposits grew $14.9bn in the quarter, in line with the market, with profits also matching market expectations at $2.5bn.

But it was not all positive as the bank set aside $160m for potential loan losses in the quarter, with a slight increase in overall provisions.

The number of late payments on home loans stayed steady, while there was a small seasonal improvement in overdue unsecured consumer loans, while the amount of “problematic” and “non-performing” loans saw a slight uptick.

This comes as both Westpac and ANZ flag a reduction in cost of living stress.

The ANZ chief executive said during it’s results the “peak of the cost of living stress” appeared to have peaked in July, with stage three tax cuts helping mortgage holders.

Westpac forecast the number of customers needing help if rates were held until 2026 was unlikely to significantly rise, as on average they were still in front of their mortgages by 11 months despite cost-of-living pressures.

“Growth in the Australian economy remains slow as higher rates continue to weigh on consumer demand and bring inflation back to the target range (of between 2 per cent and 3 per cent),” Commonwealth Bank CEO Matt Comyn said.

While underlining the current challenges, Mr Comyn struck an optimistic tone about the overall economic outlook, saying the “Australian economy remains fundamentally sound”.

“We remain focused on supporting our customers, investing for the future, generating sustainable returns for our shareholders and providing strength and stability for the broader economy to achieve a brighter future for all.”

CBA, which holds a quarter of the country’s AUD$2.2 trillion mortgage market, logged a common equity tier 1 ratio, a measure of spare cash, of 11.8 per cent as at September 30.

Operating expenses lifted 3 per cent due to wage inflation, increased investment spend and an extra day in the quarter.

CBA last traded at $150.25 – a record closing high for the stock.