Home and business lending have risen substantially at The Commonwealth Bank of Australia this quarter, but early credit strains are starting to surface.
Commonwealth Bank of Australia (CBA), the country’s largest retail and business lender, has reported robust growth in home finance and commercial credit in its third quarter of the financial year 2026, while also lifting provisions in response to a weakening economic backdrop.
Over the financial year to March 2026, CBA’s home lending balances rose 7.1 per cent, adding $41.2 billion to its mortgage book compared with the same quarter a year earlier.
The bank said it achieved what it described as “disciplined growth” in both housing loans and household deposits, stressing that the expansion was not driven by aggressive discounting or riskier credit settings.
New mortgage flows remained sizeable, with CBA advancing $45 billions of home loans in the March quarter alone.
Over the 12‑month period, home loan balances broadly tracked overall industry growth, while household deposits nudged ahead of the wider system.
Business lending balances were 12.5 per cent higher than a year earlier, an increase of $21.6 billion, outpacing growth.
In its update, CBA said it had “continued to focus” on expanding the business franchise and emphasised that growth was spread across a range of sectors.
The bank highlighted that business lending was still running ahead of system but framed this as a controlled push, noting that it had been “maintaining a disciplined approach to growth in a competitive market.”
Household deposits climbed 9.1 per cent, or $38.3 billion, over the year, leaving CBA’s funding mix anchored by deposits, which accounted for 79 per cent of total funding at March 2026.
Early stresses emerge in arrears
Alongside the growth numbers, the quarter showed a gradual normalisation in credit metrics.
Home loan arrears ticked up by 6 basis points to 0.69 per cent, while credit card arrears rose by 2 bps to 0.68 per cent.
The sharpest move was in personal loans, where arrears jumped 30 bps to 1.71 per cent, pointing to increased stress among more leveraged or unsecured borrowers.
CBA attributed these changes to a combination of seasonal patterns and deliberate choices around credit appetite, pricing, and customer mix.
The loan loss rate for the quarter was 12 bps, double the 6 bps recorded across the first half of FY26.
Loan impairment expenses came in at $316 million, equivalent to 12 bps of average gross loans and acceptances.
Provisions and outlook
The bank also strengthened its forward‑looking buffers, increasing the forward‑looking component of collective provisions by $200 million or 8 bps of gross loans and acceptances.
It said this reflected updated macro-economic forecasts and a higher weighting on its downside scenario.
Overall provision coverage remains at 1.57 per cent of gross loans and acceptances.
On the bottom line, CBA posted unaudited statutory NPAT of $2.6 billion for the quarter, 1 per cent lower than the average quarterly profit in the first half.
CEO Matt Comyn used the update to spell out the pressure the bank was seeing on the ground.
“Many Australian households and businesses are navigating cost-of-living pressures from higher energy prices and interest rates,” he said, directly linking the early rise in arrears to the squeeze on budgets.
Comyn also pointed to geopolitical risks, noting that “conflict in the Middle East is disrupting critical supply chains and contributing to global uncertainty”, helping explain why the bank has weighted its downside scenarios more heavily when setting provisions.
“As Australia’s largest bank, we are well placed to support our customers through this uncertain environment,” he said.
[Related: CBA proprietary home lending hits two-third mark]
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