CBA boss Matt Comyn says it has been "another challenging period" for many of the bank's customers. (ABC News: Keana Naughton)
In short:
The Commonwealth Bank increased its half-year profit to $5.1 billion and lifted its interim dividend by 5 per cent.
The bank says it has 65,000 tailored payment arrangements as some borrowers struggle to keep up with repayments.
What's next?
The Reserve Bank will deliver its first interest rate decision of the year next Tuesday, February 18, with CBA economists among those forecasting a rate cut.
The Commonwealth Bank has increased its profit and raised its dividend despite a "challenging period" for many customers.
Australia's biggest bank has reported a 6 per cent increase in net profit, to $5.14 billion for the first half of the financial year.
Cash profit (which excludes things such as hedging and demerged businesses) rose 2 per cent, to $5.13 billion, ahead of analyst's expectations.
Shareholders will receive an increased interim dividend of $2.25 per share, fully franked, up 5 per cent from a year ago.
In a statement to the stock exchange, CBA chief executive Matt Comyn acknowledged the economy had weakened, but said he expected a forecast interest rate cut from the Reserve Bank to provide relief.
"The Australian economy has slowed considerably, with cost of living pressures continuing to weigh on consumer demand and younger customers in particular making real sacrifices,"
he said.
"However underlying inflation is now moderating towards the target range and we expect Australia will follow offshore economies with an easing cycle starting in 2025."
CBA's net interest margin, a key profitability measure of the interest the bank earns against the interest it pays out, rose 2 basis points from the same period last year to 2.08 per cent.
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65,000 CBA customers on 'tailored payment arrangements'
Mr Comyn said the bank had maintained a focus on "proactive engagement" with customers experiencing financial hardship.
"Through supporting our customers and investing in our franchise, we have been able to deliver solid results for our shareholders, despite the weaker economic backdrop," he said.
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Photo shows A small wooden toy house with a red roof sits on top of a thin black calculator on a white surface.
CBA's loan impairment expense has dropped 17 per cent from the half year that ended on June 30, to $320 million.
However, the bank's provisions for loan impairment were up 2 per cent to $6.03 billion, driven by an 11 per cent rise in corporate provisions amid rising rates of business failure.
Consumer provisions were reduced because rising home prices gave the bank a greater buffer against potential losses in the case of home loan defaults.
The bank said its arrears rates had stabilised since the middle of 2024, and the majority of home lending customers remained ahead of their scheduled repayments.
Mr Comyn said the bank had been working with mortgage borrowers individually as cost-of-living pressures persisted.
"This half, we maintained our focus on engaging with our customers on a range of support options, and provided more than 65,000 tailored payment arrangements for those most in need of support,"
he said.
There are close to 3.5 million borrowers with home loans in Australia and CBA holds roughly a quarter of the market for home loans and other household lending.
That makes the 65,000 on special arrangements a minority, but not an insubstantial one.
Last year, corporate regulator ASIC released a report into hardship provisions, which showed a substantial group of Australians under severe financial stress.
The ASIC research found that 47 per cent of Australian adults with debt, the equivalent of 5.8 million people, struggled to make repayments in the past year, as of April 2024.