The Commonwealth Bank has posted an eye-watering $2.6 billion unaudited first-quarter cash profit, buoyed by growth in home loans and deposits.
Despite the result putting Australia’s biggest company on track to beat its record $10 billion 2025 full-year profit, investors dumped CBA shares, which tumbled 3.7 per cent to $168.51 in early trade.
Lofty valuations in Australia’s heavyweight and highly established financials sector has prompted analysts to question the source of its future growth.
CBA’s result was one per cent higher than the recent average and up two per cent on the same quarter in 2024.
Operating income was up three per cent, driven by lending and deposit volume growth.
Households and businesses were still facing significant cost-pressures but the bank was committed to supporting customers, CBA chief executive Matt Comyn said.
“Despite escalating geopolitical and macroeconomic uncertainty, we are optimistic on the outlook for the country,” Mr Comyn said.
“We are closely watching the increased competitive intensity and implications across the financial system, and we will continue to adjust our settings as appropriate.”
The negative investor result came despite the results tracking with forecasts, however an unquantified contraction in CBA’s net interest margin – the difference between a company’s interest costs and returns – had caused concern, IG Markets analyst Tony Sycamore said.
“Furthermore even after its pullback from the $192.00 high of late June, the stock remains expensive on some metrics,” he said.
CBA has a total value of more than $281 billion and employs around 50,000 people.
CommBank’s much smaller competitor the Bendigo and Adelaide Bank also sold off after reporting on Tuesday, its shares tumbling 3.2 per cent to $12.32.
The dip was easier to understand than CBA’s, after its cash earnings slipped 3.2 per cent to $120.7 million in the September quarter.
Bendigo’s balance sheet remained well-positioned for a return to growth in the second half, managing director and chief executive Richard Fennell said.
“During the quarter, we delivered several strategic milestones which will position the bank for sustainable growth in the second half of this financial year and beyond.
Australian banks have won mixed receptions to recent financial updates, with NAB shares tumbling more than four per cent and Westpac up 3.6 per cent since posting their respective full-year results.
ANZ shares are up almost five per cent to record highs since its report, the smallest of the big four banks getting a boost from taking a hard line on executive bonuses and playing catch-up with its competitors’ hefty price tags.
Shares in investment giant Macquarie Group tumbled almost six per cent immediately after its first-half profits came in more than ten per cent below expectations, after commodity prices and wind asset write downs weighed on its result.