Commonwealth Bank Lifts First-Half Profit 5%, Beating Expectations — Update

By Stuart Condie

SYDNEY--Commonwealth Bank raised its first-half profit by 5% as Australia's largest bank beat analysts' forecasts despite pressure on margins from competition for mortgages.

The lender on Wednesday reported a net profit for the six months through December of 5.37 billion Australian dollars, or about US$3.81 billion. Revenue rose by 6% to A$15.00 billion.

The average analyst forecast had been for a statutory net profit of almost A$5.17 billion from revenue of A$14.81 billion, according to data compiled by Visible Alpha.

The board lifted the interim dividend to A$2.35 a share, from A$2.25. That was ahead of the A$2.31 expected by analysts.

Operating expenses rose by 9% to A$6.92 billion, with the bank citing inflation and technology spending.

Net interest margin--essentially a measure of how much a bank makes from lending relative to how much it pays to savers--declined to 2.04%, from 2.08% at June 30.

Commonwealth Bank, which also reported a 2.08% margin a year ago, blamed competition in home-loan lending and lower income from its treasury and markets operations.

"We continue to watch the competitive intensity and its implications across the financial system. We are well placed to compete effectively and will continue to adjust our settings as appropriate," Chief Executive Matt Comyn said.

Australia's cash rate fell by 75 basis points over 2025 following three cuts by the Reserve Bank spaced across the year. The RBA has since raised the rate by 25 basis points. Bank margins typically benefit from higher rates.

The bank, which is the largest locally listed company by market capitalization, had roughly a 25% share of Australia's mortgage market at Dec. 31, flat on the same time a year earlier.

Its share of Australian household deposits edged 10 basis points higher to 26.6%, according to data from the country's prudential regulator.

Commonwealth Bank's loan impairment expense was broadly flat on a year earlier at A$319 million, which it said reflected improved credit quality. Home loan arrears fell by seven basis points over the December half, helped by the RBA rate cuts.

However, the bank expects inflation to remain elevated, keeping upward pressure on interest rates.

Write to Stuart Condie at stuart.condie@wsj.com

(END) Dow Jones Newswires

February 10, 2026 16:30 ET (21:30 GMT)