The Commonwealth Bank of Australia (ASX: CBA) share price is in focus after the ASX bank share announced its FY27 first-quarter update.
CBA is the largest bank in Australia, making billions of dollars from lending to households and businesses.
FY27 first-quarter update
Commonwealth Bank reported that in the first three months to 30 September 2026, it generated statutory net profit after tax (NPAT) of $2.8 billion and cash net profit of $2.8 billion.
The cash NPAT was flat compared to the FY26 second-half quarterly average and up 8% from the prior comparative quarter.
CBA revealed that operating income increased by 3% thanks to lending and deposit volume growth, as well as the benefit of 1.5 additional days in the quarter, partly offset by lower other operating income, primarily due to weaker markets trading income.
What drove these profit numbers?
Excluding movements in ‘liquid assets’, the underlying net interest margin (NIM) was “broadly stable” in the quarter. In other words, its lending profitability, being the margin that it makes on its loans that includes both the loan rate and the cost of that funding (including things like savings accounts).
The Australian growth in volume terms remained strong for September 2026 compared to September 2025.
Business lending growth was 13.6% ($24.6 billion), which was 1.3x faster than the overall banking system growth.
Household deposit growth was 7.7% ($34 billion), which was the same growth rate as the overall banking system growth.
Home lending growth was 6.6% ($39.8 billion), which was 1.1x faster than the overall banking system growth.
Operating expenses increased 3% primarily due to wage and IT vendor inflation, 1.5 additional days in the quarter, and higher cloud computing volumes & software licensing, partly offset by timing of marketing and vendor spending.
Operating profit (excluding credit impairments) in the FY27 first-quarter grew 8% year on year and it increased 2% compared to the FY26 second-half quarterly average.
The company said that its loan impairment expense was $300 million, representing 11 basis points (0.11%) of average gross loans and acceptances (GLA). Collective provisions increased by $105 million.
The ASX bank share said that credit quality remains “sound”, with its collective provision coverage as a percentage of credit risk-weighted assets (loans) at 1.35%.
However, CBA appeared to show that home loans that were overdue by at least 90 days reached its highest point of the last seven years of 0.80%. The higher interest rates are seemingly having an effect on borrowers.
Final thoughts on the CBA share price
Commonwealth Bank said that economic growth is slowing, but the Australian economy remains resilient, supported by “low unemployment and a strong infrastructure and private investment pipeline”.
It’s impressive that the ASX bank share managed to report cash profit year on year growth of 8%. However, it’s not a good sign that profit growth was flat and operating profit growth was just 2% compared to the FY26 second-half quarterly average. But, maintaining profit during a difficult time is commendable.
In my view, this doesn’t look like a great time to buy CBA shares because earnings growth looks limited for the foreseeable future. It’s not one of the ASX dividend shares I’d buy today.
