CBA profit drops 21pc after COVID-19 recession, low interest rates hit margins

The Commonwealth Bank of Australia has recorded a 21 per cent drop in its net profit in the wake of the nation’s first recession in almost three decades.

CBA reported a net profit after tax of $4.88 billion for the half-year to December 31, while its preferred measure of cash profit, which excludes many one-off gains and losses, was down 11 per cent to $3.89 billion.

The bank has attributed the drop to both fallout from the COVID-19 recession, which has forced it to increase its provisions for bad debts, and the resulting record low official interest rates.

A cash rate of just 0.1 per cent and RBA money printing through a $200 billion quantitative easing program have pushed mortgage interest rates to record lows and seen CBA’s net interest…