The nation’s largest bank has recorded an uptick on the rate of borrowers falling behind on their home loans as interest rates rise and the market cools.
In a trading update issued on Wednesday, Commonwealth Bank recorded a 7 basis point increase in home loans with payments that were more than 90 days late, taking the rate to 0.80 per cent.
The update covers the quarter that ended on September 30 and showed the bank had made $2.8 billion in profit, with operating income up 3 per cent but expenses up by the same amount. That profit figure was flat on preceding quarters but up 8 per cent on the same period in the last financial year.
CBA attributed the higher home loan arrears to cost of living pressures from higher interest rates and inflation. In total though, the bank’s provisions for bad loans were flat at $6.5 billion, which CBA said gave it “strong” coverage for any issues.
Chief executive Matt Comyn said in a statement that CBA was committed to helping its customers through the higher cost of living and defended the strength of the Australian economy.
“Higher inflation and interest rates continue to place uneven pressure on household incomes and business activity,” he said. “While economic growth is slowing, the Australian economy remains resilient, supported by low unemployment and a strong public infrastructure and private investment pipeline.”
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