CBA's 1Q Cash Earnings Rise 8% on Year Despite Higher Operating Expenses

By David Winning

SYDNEY--Commonwealth Bank of Australia said its first-quarter cash earnings were up 8% on year, despite the impact of elevated inflation and rising interest rates on households and businesses.

CBA said its unaudited cash net profit totaled 2.8 billion Australian dollars (US$1.94 billion) in the three months through September, matching its statutory profit for the same period. The lender said cash earnings were flat on the quarterly average for the final six months of the 2026 fiscal year.

It achieved the profit despite a 3% rise in operating expenses, which management said were mainly due to rising labor costs and IT vendor inflation, along with higher cloud-computing volumes and software licensing.

CBA said its underlying net interest margin was broadly stable in the quarter, while its CET1 ratio--a key measure of a lender's ability to withstand financial shocks--improved by 36 basis points to 11.5% before accounting for the payout of dividends to shareholders.

Australian banks are striving to protect profits at a time when consumers and borrowers are facing more pressure on their budgets after the Reserve Bank of Australia raised interest rates five times this year to tame inflation and fuel prices surged.

CBA reported a loan impairment expense of A$300 million in its first quarter, and said collective provisions rose by A$105 million, although it said credit quality remains sound.

"While economic growth is slowing, the Australian economy remains resilient, supported by low unemployment and a strong public infrastructure and private investment pipeline," said Chief Executive Matt Comyn.

Write to David Winning at david.winning@wsj.com

(END) Dow Jones Newswires

November 10, 2026 16:32 ET (21:32 GMT)