Home loan volumes up, but CommBank reports lower than expected profit

The nation's largest bank, Commonwealth Bank of Australia's has reported a 6 per cent fall in its net profit, hit by the costs associated with fixing historic misconduct issues and tighter margins due to competition and rising costs.

The CBA produced a weaker than expected result. 

First-half profit came in at $4.6 billion, down from $4.9 billion in the corresponding period last year.

Cash profit — the bank's preferred measure that strips out one-off gains and losses — rose 1.7 per cent to $4.68 billion, with higher sales volumes of loans offset by lower margins.

It lower than the $4.87 billion it reported for the first half last year.

CBA reported that cash profit fell 2.1 per cent.

The interim dividend per share was flat at $2.00. 

The bank recorded an operating income of $12.4 million which was down 1.9 per cent for the same period a year earlier. 

Volume growth in the core business resulted in lending and deposits increasing by 2 per cent, while home loan volumes increased 4 per cent.

The growth was more for owner occupiers than investors.