The majority of CBA mortgage holders remain ahead of scheduled repayments, but the number of customers falling behind has increased amid higher interest rates and cost-of-living pressures.

Those behind on their repayments by 90 days rose 18 basis points to 0.65 per cent, in line with historical average, while the number of those 30 days behind lifted 38 basis points to 1.3 per cent.

Interest-only loans make up about 10 per cent of CBA’s loan book, remaining steady year-on-year, suggesting borrowers are not switching from principal-and-interest loans to fund their mortgage repayments.

Meanwhile, bad debts, or loans that have gone sour and won’t be able to be recovered by the bank, fell 28 per cent to $802 million.

Comyn said the Australian economy remained resilient with low unemployment, continued private and public investment, as well as exports supporting the national income. Higher interest rates are slowing the economy and gradually moderating inflation, Comyn explained, but concerns remain around productivity, housing affordability and global uncertainty.

“Households are finding it more challenging to respond to the higher-price environment,” Comyn said. “They can expect some relief this year, with disposable incomes set to rebound. It will be important to keep demand constrained across the economy so that inflation returns to the target band.”

Housing is becoming ever more unaffordable for Australians, the bank stated, with people spending more than 20 per cent of their pre-tax income on mortgages, the highest level in 20 years.

‘It will be important to keep demand constrained across the economy so that inflation returns to the target band.’

CBA chief Matt Comyn

Analysts had tipped CBA would be squeezed by higher interest rates and home lending competition, but the bank revealed its net interest margin – a measure of profitability comparing banks’ funding costs with what they charge for loans – rose 1 basis point to 1.99 per cent, beating analyst forecasts.

Comyn said competition in the home lending market remained high, although it has eased over the past year, and that the cost of wholesale funding had reduced.

Comyn’s fixed salary was unchanged at $2.5 million, but his bonuses declined to bring his remuneration down from $10.4 million last year to $8.9 million in 2024.

Meanwhile, the bank’s climate report showed it has almost halved its lending to oil and gas exploration companies in the past two years, down from $3.3 billion in 2022 to $1.7 billion in 2024, as it transitions away from lending to new fossil fuel projects.

Investors and analysts had been highly anticipating CBA’s earnings result, which is seen as a bellwether for the health of the broader Australian economy.

Morningstar analyst Nathan Zaia said CBA remained a clear market leader, but industry headwinds, including competition in the lending market, could not be ignored.

“The bank remains well provisioned for the pressure on households, though, and the release of bad debt provisions could keep bad debts from moving materially higher than long-term averages in the short-term,” Zaia said.

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Jarden bank analyst Jeff Cai described CBA’s results as sound, and said net interest margins and debt remained resilient and tracked better than expected.

This would likely prompt analysts to increase their earnings estimates for the bank, although CBA’s share price was already starting to look expensive following its gains this year, and analysts had an overwhelmingly bearish rating on the stock.

“Overall, the result should bode well for the sector as it reinforces the view that bank earnings continue to be resilient while the balance sheet is robust,” Cai said.