CBA surges to record high

Commonwealth Bank says combination of solid revenue growth and cost discipline resulted in a strong profit in September quarter.

Commonwealth Bank of Australia (CBA) says a combination of solid revenue growth and cost discipline has precipitated a strong first-quarter profit for the lender.

Shares in the lender surged to fresh all-time highs on the news. At 1050 AEST, CBA shares were 1.47% higher at $78.15, against a benchmark index fall of 0.33%.

In earlier trade, CBA shares hit a fresh all-time high of $78.40.

In the three months to September 30, CBA said its unaudited cash earnings totalled $2.1 billion, compared to $1.85 billion in the previous corresponding period.

The lender said statutory net profit in the same period was also $2.1 billion, an increase on the $1.8 billion posted in the first quarter of fiscal 2012.

CBA said its group net interest margin was marginally lower than the prior half, reflecting deposit margin compression in a lower interest rate environment.

Lower interest rates helped spur growth in business activity compared to a year ago, though total credit growth was modest due to higher levels of loan repayments.

In the quarter, the lender said its strong liquidity and funding positions were maintained, with liquid assets standing at $137 billion, customer deposit funding at 64% and the average tenor of the wholesale funding portfolio unchanged at 3.8 years.

Growth in system mortgage credit was modest, and lagging slightly behind group mortgage growth.

"Whilst lower interest rates have supported strong growth in new business activity compared to the prior year, this has been balanced by higher levels of loan repayments," the lender said.

Commercial lending growth reflected low system credit growth in the quarter, while growth in household deposits remained strong and broadly in line with system.