The Commonwealth Bank of Australia (ASX: CBA) share price is under the spotlight after the bank reported its FY26 first-quarter update.
Commonwealth Bank FY26 first-quarter update
The bank reported that in the three months to September 2025, cash net profit of $2.6 billion was up 2% year on year. This also represented a 1% increase compared to the quarterly cash profit of the FY25 second half.
The bank also said that its statutory net profit was around $2.5 billion for the quarter.
Income
CBA reported that its operating income increased by 3%, driven by lending and deposit volume growth, higher non-interest and 1.5 additional days in the quarter.
The bank reported that its business lending grew by 10.5%, household deposits increased by 9.5% and home lending rose by 6.1%. Compared to the overall banking system, its business lending grew at the same speed, household deposits rose at 1.2x and home lending increased at 1.1x.
Pleasingly, CBA said that retail transaction accounts increased by more than 175,000 in the quarter, primarily driven by new-to-bank account openings. CBA channels represented 68% of new CBA home loans.
While lending growth was solid, the bank reported that its headline net interest margin (NIM) – how much profit the bank makes on its lending – reduced because of the “mix effects of strong growth in lower yielding assets and institutional repos”.
Expenses
CBA reported that its operating expenses grew by 4%, excluding restructuring and notable items. This increase was due to wage and IT vendor inflation, as well as the additional 1.5 additional days in the quarter.
But, that expense growth was partially offset by seasonally lower IT vendor spending and the benefits of ongoing productivity initiatives.
The bank also reported a loan impairment expense of $220 million, with loan provisions broadly flat. CBA said portfolio credit quality has remained sound with lower consumer arrears across personal loans, credit cards and home loans.
Its percentage of troublesome and non-performing loans dropped to 0.94%, down from 0.97% at June 2025 and 1.07% at September 2024. Lower interest rates and inflation are helping here.
Outlook for the CBA share price
CBA said it’s closely watching the increased competitive intensity of the sector and what implications this may have for the financial system.
It noted that economic growth is recovering and disposable income is rising for many households.
CBA is part of the banking sector, so what happens in the wider economy will affect the biggest bank too – it isn’t insulated, as conservatively positioned as it is.
It’s good to see the bank is growing a little faster than the overall market because that means it’s capturing market share, thanks to its ability to deliver home loans through its own systems rather than relying on brokers.
I wouldn’t call the CBA share price a good buy today because it’s trading at a high multiple for very little earnings growth. But, I’d be happy enough if I were a long-term shareholder.
Instead, I’d want to look at other ASX bank shares.
