Banking giant Commonwealth (ASX:CBA)
has reported a twofold increase year on year to $2.4 billion in net cash earnings for the March Quarter of FY21, representing a 24 per cent hike from average quarterly profits in the first fiscal half.
The company released a trading update today, indicating its net cash earnings for the first three months of the calendar year rose by $1.2 billion, following the big-four bank’s adjustments to debt management and improved economic conditions.
CBA’s CEO Matt Comyn commented on the upbeat data, “Our disciplined focus on operational excellence was reflected in continued strong operational performance in the March quarter”.
Commonwealth Bank revealed rapidly strengthening business confidence and conditions prompted the bank to trim the second quarter’s credit provisions by $300 million to $6.5 million in the third quarter. The company has also reported a depletion in bad debts of $400 million from the previous quarter.
The move generated a gain of $136 million and emulated other big banks’ recent propensity to slash provisions for bad debts.
The financial institution also reported booming lending activity during the quarter, as CBA outperformed the lending sector’s average pace in delivering home and business loans.
CBA said, “This was highlighted by strong home loan funding volumes, particularly through our proprietary network, and business lending continuing to grow at greater than three times system levels.”
The bank witnessed a rise in its CET1 (Level 2) ratio of 10 basis points in the period, strongly positioning the bank’s finances to support new and existing customers
Market researchers believe this is a further indication of the ongoing economic recovery from pandemic woes, reflected in rapid credit growth and reduced bad debt costs
Shares in the Commonwealth Bank of Australia (ASX:CBA)
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