Commonwealth Bank profit drops to $9.5 billion as Aussies feeling cost-of-living pinch

Australia’s biggest bank, Commonwealth Bank (CBA), has recorded a drop in profit. The major bank’s statutory profit slipped 6 per cent, falling to $9.48 billion for the 2024 financial year.

CBA’s annual cash net profit after tax was $9.8 billion for the year, which was 2 per cent down on the previous 12 months. Analysts had expected the bank to report a $9.77 billion net cash profit, below its $10.2 billion profit last year.

The major bank said the drop in profits was due to lower lending and deposit margins, driven by inflationary increases in operating expenses and increased business competition.

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CBA chief executive Matt Comyn said higher interest rates were “slowing the economy” and “gradually moderating inflation”.

“The Australian economy remains resilient with low unemployment, continued private and public investment, and exports supporting national income,” he said.

“Australia remains well positioned but downside risks continue around productivity, housing affordability, as well as ongoing global uncertainty.”

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Aussies ‘challenged’ by cost-of-living pressures

CBA has warned more homeowners are falling behind on their mortgage repayments due to rising rates and the cost of living.

Home loans that are 90 or more days in arrears have increased from 0.47 to 0.65 per cent, as higher interest rates continue to squeeze borrowers.

Credit cards and personal loans 90 or more days overdue were also on the increase, sitting at 0.74 and 1.50 per cent respectively.

“Many Australians continue to be challenged by cost-of-living pressures and a fall in real household disposable income,” Comyn said.

The bank noted the majority of home lending customers remained in advance of their scheduled repayments.

CBA holds about a quarter of Aussie home loans and 22 per cent of business deposits. It said 132,000 tailored payment arrangements had been made for mortgage and consumer finance customers to help them manage their repayments.

Young Aussies have also been feeling the pinch, with savings for those aged between 25 and 34 dropping 5.2 per cent in the three months to June. That's compared to those aged over 65 seeing a 7 per cent rise.

The board has declared a full-franked final dividend of $2.50 a share, up 3 per cent on 12 months ago, bringing the total for the year to $4.65 a share.

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