Commonwealth Bank reports unaudited cash earnings of ~$1.9b in 1Q13

Group liquids were at $130b.

The Commonwealth Bank advised that its unaudited cash earnings for the three months ended 31 March 2013 (“the quarter”) were approximately $1.9 billion.

Statutory net profit on an unaudited basis for the same period was also approximately $1.9 billion, with non-cash items treated on a consistent basis to prior periods. Key outcomes for the quarter are outlined below.

Overview

• Revenue growth continued to reflect a combination of conservative business settings and modest system credit growth;
• Group Net Interest Margin was higher in the quarter due to a combination of factors including prior period asset re-pricing, partly offset by higher funding costs;
• Trading income in the quarter was at a level consistent with the 1H13 run-rate;
• Expenses continued to be well managed;
• Group liquids remained very strong at $130 billion;
• Total impairment expense was $255 million in the quarter, or 19 basis points of total average loans;
• Asset growth was funded by deposit growth in the quarter, with the deposit funding percentage increasing to 65 per cent at the end of March. The average tenor of the wholesale funding portfolio was extended further in the quarter to 3.8 years;
• The Group’s Internationally Harmonised Common Equity Tier 1 (CET1) ratio was 10.3 per cent as at 31 March 2013, compared to 10.6 per cent in December 2012. Continued strong organic capital generation in the quarter was offset by the declaration of the 2013 interim dividend, which had a negative impact of 92 basis points in the period;
• The Group’s March Quarter Pillar 3 disclosures show that credit quality remained sound. Arrears rates in home lending were stable in the quarter, but seasonally higher in unsecured consumer lending. Corporate credit quality was stable, with Total Impaired Assets largely unchanged from Dec-12 at $4.3 billion; and
• Provisioning levels and coverage ratios remained strong, with the economic overlay maintained.