UPDATE 2-Australia's CBA cash profit doubles in rebound from COVID slump
Adds details on lending, margins, CEO comment
By Shashwat Awasthi
May 12 (Reuters) - Commonwealth Bank of Australia's CBA.AX third-quarter cash profit doubled as a rapid economic recovery spurred lending and enabled the country's largest bank to reverse bad debt provisions made during the COVID-19 pandemic.
Australia's control over the pandemic, near-zero interest rates and government spending has allowed its banks to recover quicker than their global peers and move funds set aside for potential COVID-19 losses back into profits.
Last week, peers Westpac WBC.AX, National Australia Bank NAB.AX and Australia and New Zealand Banking Group ANZ.AX together reversed nearly A$1 billion ($783.8 million) in bad debt provisions, boosting their half-year profits and dividends. nL4N2MS4JK nL1N2MQ00W nL4N2MR3UN
"Credit quality across our lending portfolios remained sound," CBA Chief Executive Officer Matt Comyn said in a statement on Wednesday.
The lender's cash net profit after tax from continuing operations rose to A$2.4 billion from about A$1.2 billion a year earlier. nAZN015R9H
CBA, which follows a different reporting calendar than its rivals, said it booked a loan impairment benefit of A$136 million in the quarter, compared with a A$1.6 billion expense last year.
It lowered its total credit provisions to A$6.5 billion at the end of March, from A$6.8 billion at the end of December.
The bank said its adjusted net interest margin - a key metric of profitability - also benefited from an increase in zero-cost deposits and lower wholesale funding costs.
CBA, which aims to take the No.1 spot for business lending from NAB, said its quarterly business lending volume grew 8.1%, at more than three times the market rate.
The Sydney-based lender reported troublesome and impaired assets of A$7.8 billion at the end of March, lower than the A$8.2 billion on its books three months earlier.
The lender said it saw a small rise in home loan arrears in the quarter as deferral of mortgage payments ended, and expects further modest increases in the coming months.
($1 = 1.2758 Australian dollars)
(Reporting by Shashwat Awasthi in Bengaluru; Editing by Shailesh Kuber and Stephen Coates)