CBA reports A$2.8 billion cash NPAT, 11.5% CET1 and A$300 million impairment

Quarterly profit holds steady as lending volumes expand

Commonwealth Bank of Australia (ASX:CBA) produced approximately A$2.8 billion in unaudited cash NPAT in the three months to 30 September 2026, up 8% on the prior comparative quarter and flat against the average quarterly result for the second half of FY26. The result gives Australia’s largest bank a solid start to FY27, although the composition matters: volume growth did much of the work while credit costs and signs of borrower stress moved higher.

Operating income rose 3% against the 2H26 quarterly average, supported by lending and deposit growth, as well as 1.5 additional days in the quarter. Net interest income increased 4%, while CBA said its underlying net interest margin was broadly stable after excluding movements in liquid assets. Other operating income fell 5%, primarily because higher yields weighed on Markets trading income in fixed income and rates portfolios.

Home lending and deposits provide the growth engine

CBA’s balance sheet continued to expand across its core franchises. Home loans increased A$39.8 billion, or approximately 1.1 times system growth, over the 12 months to September, while household deposits grew A$34.0 billion at roughly system pace. Business lending grew above system across a diversified range of sectors, with business transaction accounts up 6% year on year.

The growth came despite softer housing demand. Home loan application volumes were 16% below the prior comparative period during the quarter, and CBA’s proprietary share of new home-loan flows was 62%, down from 64% in the second half of FY26. The bank reported A$44 billion of new home-loan funding, suggesting the stock of lending continued to grow even as the flow of applications weakened.

Arrears and impairment charges move higher

Loan impairment expense reached A$300 million, equivalent to 11 basis points of average gross loans and acceptances, compared with A$234 million in the 2H26 quarterly average. Collective provisions increased by A$105 million, primarily reflecting the impact of lower house prices on the mortgage portfolio, while total provisions remained at A$6.5 billion.

Home-loan arrears increased by 7 basis points during the quarter, which CBA attributed to cost-of-living pressure, higher interest rates and slower progression through late-stage collections activity. Corporate troublesome and non-performing exposures rose to A$6.9 billion, or 1.00% of total committed exposures, with the bank identifying a small number of single-name downgrades among the drivers. The Pillar 3 disclosure put total non-performing exposures across the group at A$12.034 billion at 30 September, up from A$11.094 billion at June.

Capital remains above minimums as risk-weighted assets rise

CBA’s Level 2 CET1 ratio was 11.5% at 30 September, compared with an APRA minimum requirement of 10.25%. The ratio increased by 36 basis points during the quarter after allowing for the A$4.5 billion 2H26 dividend, with earnings contributing 52 basis points and higher risk-weighted assets reducing the ratio by 22 basis points. The bank also completed the on-market purchase of approximately A$560 million of shares to neutralise its dividend reinvestment plan, which had a 12.4% participation rate; shareholders had previously received a A$2.70 final dividend.

Total risk-weighted assets rose A$9.0 billion, or 1.7%, to A$531.4 billion. Credit risk-weighted assets increased A$7.2 billion, driven mainly by commercial portfolios and domestic mortgages, while operational risk-weighted assets rose A$2.2 billion after the annual update to the business indicator component. CBA’s Tier 1 ratio was 13.0%, its total capital ratio was 20.5% and its leverage ratio was 4.4%, above the 3.5% minimum.

Funding buffers remain substantial

Liquidity metrics were unchanged at strong levels, with a Liquidity Coverage Ratio of 132% and a Net Stable Funding Ratio of 115%. Customer deposits represented 79% of total funding, while CBA had issued A$14 billion in long-term wholesale funding during FY27 to date. The Pillar 3 report also recorded A$191.5 billion of average high-quality liquid assets during the quarter.

That financial resilience gives CBA room to absorb a degree of deterioration, but it does not remove the need to track the direction of credit metrics. The next test is whether arrears and non-performing exposures stabilise as household budgets remain under pressure, or whether the loan book’s rapid expansion begins to carry a more visible cost.