Commonwealth Bank of Australia, the country's top lender by market value, posted a near 10 percent rise in first-quarter cash profits on Wednesday as demand for home loans remained strong and bad debt charges fell.
Unaudited cash profits for the three months to Sept. 30 totaled A$2.3 billion ($2 billion), CBA said, compared with A$2.1 billion reported in the same period a year ago.
Group net interest margins fell slightly while revenues rose faster than costs, it said.
Three of Australia's major four banks, including CBA, have posted record profits in the recently-ended financial year although their results highlight future challenges in maintaining this earnings momentum.
Intensifying lending competition has driven margins to near record lows, bad debt charges are widely seen as getting bottomed out while concerns banks may be asked to keep aside more capital have kept investors on the sidelines.
A government-backed inquiry tasked with providing a blueprint for the country's financial system over the next decade is due to release a final report this month, and expectations have grown that it could recommend a higher capital regime for Australia's "Big Four" banks.