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    The impact of a COVID-19 stricken Australian economy has left its mark on Commonwealth Bank (CBA) in its latest financial results release.

    The bank suffered a 16% drop in quarterly cash profit, leaving it at $1.8 billion for the period. The hit included a $300 million jump in total credit provisions standing at $6.7 billion, prompted by the impact of COVID-19. Without this provisioning, its profit fall would have halved to just 8%.

    In addition, it saw a 2% jump in expenses relating to customer remediation and reduced earnings.

    Read next: CBA in Aussie merger talks

    Speaking on the results, CEO Matt Comyn noted that the bank retained a leading capital position in spite of the fact that it paid out more than $1.7 billion in dividends during the second half.

    “Operating performance in the quarter was highlighted by balance growth in home lending, business lending and deposits, which helped offset ongoing margin pressures from lower interest rates,” he said, as quoted by Australian Financial Review.

    “Balance sheet settings remained strong, with loan loss provisioning coverage further strengthened and a CET1 capital ratio of 11.8%, up 20 basis points in the quarter.”

    In terms of home loan growth, CBA noted that it was above system, thanks to high application volumes and fast turnaround times. Business lending, meanwhile, was also above system with the bank noting “solid growth”.

    Home loan deferrals meanwhile, dropped substantially with the bank reporting that a large number of deferral arrangements ended in the period, with the number of frozen mortgages by the end of the month standing at 46,000 – representing a drop from June’s peak of 125,000.

    There was also a sharp drop among SME customers – there were just 4,200 SME customers with loans worth $1.5 billion in total – that’s down from 83,000 with a value of $15 billion at the peak, reported Australian Financial Review.

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    Original Article