Australia's largest lender, the Commonwealth Bank, has lifted its quarterly cash profit four per cent, to $2.4 billion.
CBA said growth in deposits was strong in the three months to September 30, home lending was growing consistently, and domestic business lending grew at mid-single digit levels.
"Across key markets, household deposits balance growth was strong and above system. Home lending continued to trend in line with recent growth rates, whilst core domestic business lending growth remained at mid-single digit levels," CBA said in trading update.
CBA's underlying group net interest margin, excluding treasury and markets, remained stable. However, overall group net interest margin was slightly lower, partly reflecting the impact of exchange rate movements.
IG market strategist Angus Nicholson said CBA's quarterly results were largely within expectations, but the stock was being sold off along with the other big banks on Thursday.
"The CBA results in themselves look fine - within estimates," Mr Nicholson said.
"But the outlook is still very cloudy for the banks, and I think that's what's really led to the sell-off."
Mr Nicholson said CBA's net interest margins were pretty much flat, which indicated the tough competition in the banking sector.
Also, the housing market was starting to slow down, which was expected to be reflected in CBA's future financial results.
CBA's quarterly results follow record full year cash results by its three major rivals Westpac, National Australia Bank and ANZ.
Australia's four big banks delivered combined annual cash earnings of $30 billion in 2015, but are looking at slowing growth and declining returns, because of rising competition, a slowing housing market and stricter regulatory capital requirements.
They each lifted their standard variable home loan rates for owner occupiers by between 0.15 per cent and 0.20 per cent in late October.
They moved on rates after raising billions of dollars to help them comply with new regulations designed to ensure they would be protected against any future financial shocks.
CBA said its credit quality remained sound, with arrears reducing across all consumer portfolios. Troublesome and impaired assets for the September quarter fell to $5.5 billion.
Shares in CBA fell 73 cents to $75.85.
CBA OFF TO A POSITIVE START IN 2015/16
* Q1 cash profit up 4pct to $2.4b
* Q1 statutory profit of $2.3b, down from $2.4b
* Q1 troublesome, impaired assets down to $5.5b
* Total quarterly impairment expense of $220m
Share
