Profits up for Australia’s biggest home loan lender
Commonwealth Bank CEO says Australia’s strong banking system placed the economy in a good position to weather domestic and global challenges
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Profits at the Commonwealth Bank are up 10 percent on this time last year, according to its latest trading update released today.
The country’s largest mortgage lender posted an unaudited cash net profit after tax of $2.6 billion for the third quarter of this financial year. At the same time it noted that growth had slowed by 2 percent over the first half of the year.
“Volume growth (has been) offset by lower net interest margins primarily from continued competitive pressure in home loan pricing and customers switching to higher yielding deposits,” the bank said in a statement.
“Competition for home loans has remained intense in Australia and New Zealand.
“Non-interest income was 11 percent higher, primarily driven by higher trading income and the non-recurrence of losses from equity accounted investments in the prior half.”
The bank credited its ‘franchise strength, customer focus and consistent operational execution’ for the profits it had delivered, pointing to particularly strong growth in the retail bank sector, with the number of new retail transaction accounts opened up by a third.
It also noted that home loan arrears were still relatively low at 0.44 percent, which the CBA said was a reflection of low unemployment levels.
CBA CEO Matt Comyn said the bank was ‘committed’ to supporting customers through cost of living pressures and higher interest rates, adding that Australia is well placed to weather domestic and global challenges.
“We remain positive on the medium-term outlook,” he said. “The strength of our balance sheet means we are well placed to continue supporting our customers and the broader Australian economy while delivering sustainable returns to our shareholders.”
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The pandemic-fuelled love affair with casual footwear is fading, with Bank of America warning the downturn shows no sign of easing.
The pandemic-fuelled love affair with casual footwear is fading, with Bank of America warning the downturn shows no sign of easing.
2 minThe boom in casual footware ushered in by the pandemic has ended, a potential problem for companies such as Adidas that benefited from the shift to less formal clothing, Bank of America says.
The casual footwear business has been on the ropes since mid-2023 as people began returning to office.
Analyst Thierry Cota wrote that while most downcycles have lasted one to two years over the past two decades or so, the current one is different.
It “shows no sign of abating” and there is “no turning point in sight,” he said.
Adidas and Nike alone account for almost 60% of revenue in the casual footwear industry, Cota estimated, so the sector’s slower growth could be especially painful for them as opposed to brands that have a stronger performance-shoe segment. Adidas may just have it worse than Nike.
Cota downgraded Adidas stock to Underperform from Buy on Tuesday and slashed his target for the stock price to €160 (about $187) from €213. He doesn’t have a rating for Nike stock.
Shares of Adidas listed on the German stock exchange fell 4.5% Tuesday to €162.25. Nike stock was down 1.2%.
Adidas didn’t immediately respond to a request for comment.
Cota sees trouble for Adidas both in the short and long term.
Adidas’ lifestyle segment, which includes the Gazelles and Sambas brands, has been one of the company’s fastest-growing business, but there are signs growth is waning.
Lifestyle sales increased at a 10% annual pace in Adidas’ third quarter, down from 13% in the second quarter.
The analyst now predicts Adidas’ organic sales will grow by a 5% annual rate starting in 2027, down from his prior forecast of 7.5%.
The slower revenue growth will likewise weigh on profitability, Cota said, predicting that margins on earnings before interest and taxes will decline back toward the company’s long-term average after several quarters of outperforming. That could result in a cut to earnings per share.
Adidas stock had a rough 2025. Shares shed 33% in the past 12 months, weighed down by investor concerns over how tariffs, slowing demand, and increased competition would affect revenue growth.
Nike stock fell 9% throughout the period, reflecting both the company’s struggles with demand and optimism over a turnaround plan CEO Elliott Hill rolled out in late 2024.
Investors’ confidence has faded following Nike’s December earnings report, which suggested that a sustained recovery is still several quarters away. Just how many remains anyone’s guess.
But if Adidas’ challenges continue, as Cota believes they will, it could open up some space for Nike to claw back any market share it lost to its rival.
Investors should keep in mind, however, that the field has grown increasingly crowded in the past five years. Upstarts such as On Holding and Hoka also present a formidable challenge to the sector’s legacy brands.
Shares of On and Deckers Outdoor , Hoka’s parent company, fell 11% and 48%, respectively, in 2025, but analysts are upbeat about both companies’ fundamentals as the new year begins.
The battle of the sneakers is just getting started.
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