Commonwealth Bank has reported a 6 per cent rise in first-quarter profit, boosted by an improvement in trading income and cost controls.
The bank said its unaudited cash profit for the three months to end-September was $1.85 billion, up from $1.75 billion a year ago. Because of the limited nature of the trading update, few analysts forecast quarterly earnings.
Shares in CBA slipped 28 cents, or 0.4 per cent, to $57.22 in early trade, slightly underperforming the other big banks. The stock has risen nearly 17 per cent so far this year, behind Westpac and ANZ but still ahead of 10.6 per cent gain for the benchmark S&P/ASX 200 index.
The bank said its unaudited net profit in the three months to September 30 was approximately $1.8 billion.
That puts CBA on track for a full-year net profit of about $7.2 billion, which would be up from a record net profit of $7.1 billion in the 2011-12 financial year.
"Revenue growth continued to reflect a combination of conservative business settings, relatively slower system credit growth and elevated funding costs," said the bank, which offers one in every four mortgages in a $1.2 trillion market.
Tier one capital, a measure of a bank's ability to absorb unexpected losses, was at 10.2 per cent, up from 10 per cent in June.
Its retail banking operations ‘‘performed reasonably well’’ during the three months to September, with improved lending margins, growth in deposits and good cost discipline, CBA said.
Business banking was impacted by low demand for loans but, CBA said, its business lending had grown ahead of the industry average.
Net interest margins, a key measure of the profitability of its lending, were broadly in line with margins in the second half of the 2011-12 financial year, it said.
Movements in interest rates had largely offset the costs of attracting deposits, which were used to fund lending, the bank said.
The bank said impairment expenses were broadly stable at 21 basis points of total average loans, or $291 million in the quarter.
CBA also said the quality of its loan portfolio remained strong, with arrears stable or lower than previous periods.
ANZ, NAB and Westpac all reported full-year earnings in recent weeks showing rising bad debt charges, underlining the challenge facing the country's banks from slowing growth in China.