Commonwealth Bank of Australia (ASX: CBA) has delivered a steady performance for the March 2025 quarter, underpinned by disciplined execution, strong capital management, and stable earnings. The nation’s largest lender reported an unaudited cash net profit after tax (NPAT) of approximately $2.6 billion, reflecting a 6% increase compared to the same period last year, and remaining flat against the first-half average.
With its share price hovering at $167.26, up 0.67% on the day of the announcement, CBA maintains a market capitalisation of $278 billion, firmly cementing its dominance in the Australian banking sector. The bank’s stock has soared over 40% in the past 12 months, outperforming both the ASX 200 and the financials sector significantly.
Snapshots of CommBank March 2025 Results [CommBank/Market Index]
Solid Core Performance Despite Economic Challenges
CBA’s operating income rose by 1% over the quarter. This modest gain was driven by higher lending volumes and improved trading income. Net interest income also increased by 1%, with growth in the bank’s replicating portfolio and equity hedging partially offset by fierce competition for deposits and fewer trading days in the quarter. When excluding non-recurring income, net interest margin remained stable, which speaks to the bank’s sound underlying business operations.
Trading income and the absence of negative impacts from minority investments helped lift other operating income by 3%, contributing further to the bank’s revenue base.
CBA’s March Quarter Performance: Modest growth in operating income and lending volumes, with stable margins, controlled expenses, and solid operating performance. [CommBank]
Operational Costs Rise Slightly with Continued Investment
Operating expenses were up 1% during the quarter, primarily due to continued investment in technology and frontline banking staff. These costs were balanced to some extent by ongoing productivity gains and the impact of the shorter trading period. Importantly, these investments support CBA’s long-term strategy to maintain industry leadership in customer experience and digital innovation.
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Steady Loan Growth Across Home and Business Sectors
The quarter saw strong lending performance, with home loans increasing by $6 billion. CBA continues to write the majority of its loans through proprietary channels, which accounted for 68% of new home loan flows. Household deposits also rose by $4.9 billion, supported by the opening of around 150,000 new transaction accounts, many of which came from new migrant customers.
Business banking remains a growth engine for the group. Transaction accounts in the business division increased 7% year-on-year to 1.31 million accounts, while lending to businesses grew faster than the system average, highlighting CBA’s expanding presence across various industries.
Credit Quality Holds, but Arrears Show Caution Signs
CBA maintained a loan impairment expense of $223 million, or 9 basis points of average Gross Loans and Acceptances. Although still manageable, the bank observed increases in consumer arrears and exposures within the corporate loan book:
- Home loan arrears rose to 0.71% (+5 bpts)
- Personal loan arrears jumped by 19 basis points, reflecting seasonal patterns
- Credit card arrears remained broadly unchanged
- Corporate non-performing exposures climbed to $6.6 billion, or 1.06% of corporate exposure, due to specific cases across multiple sectors
Despite these trends, overall portfolio credit quality remains sound. The bank’s total credit provisions increased slightly to $6.4 billion, with a healthy provision coverage ratio of 1.64%, allowing CBA to remain well-protected against future credit stress.
Strong Capital Position and Funding Mix
CBA’s capital metrics remain robust. Its Common Equity Tier 1 (CET1) capital ratio at Level 2 rose to 11.9%, a full 165 basis points above the regulatory minimum of 10.25%. This increase came even after distributing $3.8 billion in dividends to over 814,000 shareholders, reinforcing CBA’s capacity to generate capital organically.
The bank also completed $36 billion in long-term wholesale funding, fully meeting its FY25 funding requirement. Its funding composition reflects a conservative stance, with 77% of total funding sourced from customer deposits, and long-term wholesale debt now representing 69% of the bank’s total wholesale funding.
Liquidity metrics remain very strong:
- Liquidity Coverage Ratio (LCR): 133%
- Net Stable Funding Ratio (NSFR): 116%
These figures not only exceed APRA’s regulatory benchmarks but also underscore the bank’s prudent risk management and long-term stability.
Commitment to Shareholders and Economic Resilience
CBA continues to deliver value to investors and the broader Australian community. Its latest dividend payout supported over 13 million Australians through superannuation funds, underlining its integral role in national financial wellbeing.
CEO Matt Comyn acknowledged the ongoing pressures faced by Australian households and businesses, citing cost-of-living challenges and global uncertainty. However, he stressed that Australia remains well-positioned, with government infrastructure spending, a strong employment environment, and easing inflation helping cushion economic volatility.
“We remain focused on supporting our customers, maintaining consistent and disciplined execution, investing in our franchise, and generating sustainable returns for our shareholders,” Comyn said.
Investor Outlook: Growth with Stability
CommBank Stock Performance- 14 May, 2025 [Market Index]
CBA’s latest results highlight the bank’s ability to navigate economic uncertainties while preserving core profitability and delivering shareholder returns. For investors, the appeal lies in its:
- Strong and stable earnings profile
- Consistent dividend payments
- Well-managed credit and capital positions
- Continued investment in future-focused initiatives
With the stock trading near its 52-week high and year-to-date gains over 9%, CBA remains one of the most attractive large-cap investments on the ASX. As global markets face macroeconomic and geopolitical turbulence, Commonwealth Bank stands out as a pillar of reliability in the Australian financial sector.
