Economy resilient, but cost pressures are rising: CBA

Commonwealth Bank CEO Matt Comyn said rising energy and wage costs are concerns for business borrowers and may be among the issues to be discussed with Treasurer Jim Chalmers at a meeting of bank CEOs next week.

CBA chief Matt Comyn: “It is hard to find any problems that are evident at the moment,” he told The Australian Financial Review. “Less than half the changes in the cash rate are currently being felt by households, due to a combination of delays [in passing rates on] and the proportion of customers on fixed rates. That will get to 70 per cent by March or April,” he said.“We think rates will reach 3 per cent by the end of the calendar year, and there will be a pause after that. Our best estimate is we will be on hold for a few months in 2023,” he said.

CBA shares rose 1.2 per cent to $106.32 by early afternoon trading, performing better than the other major banks, as analysts pointed to a stronger-than-expected net interest margin over its first quarter, and the ultra-low bad debts. Credit quality continued to improve, with consumer arrears and “troublesome and impaired assets” falling, the result of the strong labour market. It booked a loan impairment expense of $222 million for the quarter, which is just 0.1 per cent of its average gross loans and acceptances.

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Source: SkyNewsAust - 🏆 7. / 78 Read more »