Commonwealth Bank of Australia reported a robust half-year result for December 2025, with a 6% rise in cash NPAT to $5.445 billion and a 10-cent dividend increase, underpinned by disciplined growth and strong capital management.
- 6% increase in cash NPAT to $5.445 billion
- Dividend per share raised by 10 cents to $2.35
- Stable margins amid disciplined volume growth across retail, business, and institutional segments
- Strong capital position with CET1 ratio at 12.3%, above APRA minimum
- Significant investments in technology and AI enhancing customer experience and operational efficiency
Strong Financial Performance
Commonwealth Bank of Australia (CBA) has delivered a solid half-year financial performance for the period ending 31 December 2025. The bank reported a 6.1% increase in cash net profit after tax (NPAT) to $5.445 billion, reflecting strong operational execution and disciplined growth across its core segments. This result was achieved despite a competitive environment and ongoing investment in technology and frontline services.
The bank’s statutory NPAT stood at $5.4 billion, broadly in line with the cash NPAT figure, underscoring the quality and sustainability of earnings. Operating income rose 6.6% to $15.021 billion, supported by volume growth in lending and deposits, while operating expenses increased 5.5%, driven by inflation and strategic investments.
Dividend and Capital Strength
Reflecting confidence in its earnings and capital position, CBA increased its interim dividend per share by 10 cents to $2.35, maintaining a payout ratio of approximately 74% on a normalised basis. The dividend reinvestment plan (DRP) is expected to be fully neutralised, supporting shareholder returns without diluting capital.
The bank’s Common Equity Tier 1 (CET1) capital ratio was 12.3% at Level 2, comfortably above the Australian Prudential Regulation Authority (APRA) minimum of 10.25%. This strong capital base supports ongoing franchise growth and provides resilience against economic uncertainties.
Disciplined Growth Across Segments
CBA demonstrated disciplined volume growth across retail, business, and institutional banking. Retail mortgage lending grew 7% year-on-year, with proprietary home loan originations accounting for 67% of new fundings, which are typically more profitable than broker-originated loans. Business lending expanded by 12% year-on-year, outpacing system growth by 1.3 times, while institutional banking continued to deepen client relationships and win new mandates.
Deposit funding remains a cornerstone of CBA’s balance sheet strength, with customer deposits constituting 79% of total funding, up 2% from the prior period. The bank’s funding profile is conservative, with a weighted average maturity of long-term wholesale funding at 5.2 years, supporting stability and flexibility.
Technology and AI Leadership
Investment in technology and artificial intelligence (AI) remains a strategic priority for CBA. The bank has accelerated its digital transformation, including the migration of core banking systems to the cloud and the expansion of AI-powered customer engagement tools. The CommBank app continues to lead the market with over 9.4 million active users, while the CommBank Yello loyalty program has delivered more than $190 million in customer benefits.
CBA’s AI initiatives include the launch of GenAI Studio and partnerships with leading AI providers such as OpenAI and Anthropic. These investments have enhanced operational efficiency, improved risk management, and strengthened customer safety through real-time fraud detection and scam disruption.
Prudent Risk and Credit Management
Credit quality remains sound, with loan impairment expenses stable and low at 6 basis points of gross loans and acceptances. Troublesome and non-performing exposures have declined slightly, supported by conservative provisioning and improving arrears trends, particularly in home loans and consumer finance portfolios.
The bank maintains strong provision coverage above the central economic scenario, reflecting a forward-looking approach amid elevated geopolitical risks and macroeconomic uncertainty. This prudent stance underpins CBA’s resilience and capacity to support customers through varying economic cycles.
Bottom Line?
CBA’s disciplined execution, strong capital position, and technology investments position it well for sustainable growth amid evolving market dynamics.
Questions in the middle?
- How will upcoming regulatory changes, including the phase-out of Additional Tier 1 capital, impact CBA’s capital strategy?
- What are the growth prospects and margin pressures in CBA’s institutional banking segment amid competitive intensity?
- How will continued investment in AI and digital platforms translate into customer acquisition and retention over the next 12 months?