Commonwealth Bank reports profit surge as home loan applications drop 15% since May

The Commonwealth Bank announced a 7% increase in net profit, reaching $10.87 billion and delivering a fully franked final dividend of $2.70 per share. At the same time, the bank’s home-loan applications have fallen 15% since May, reflecting the impact of three interest-rate hikes by the Reserve Bank and sweeping tax reforms in the May federal budget. Rival banks Westpac and NAB have reported comparable falls of 20% and 15% in their mortgage pipelines.

Matt Comyn said the housing market has softened from a high base but application volumes appear to have stabilised recently. The bank’s net interest margin slipped slightly to 2.05%, while operating costs rose 6% to $13.76 billion due to inflation, technology investment and fraud-prevention efforts. CBA highlighted that it grew at or above the broader banking system across all five major divisions, a first in 15 years.