Australia's second largest bank Commonwealth Bank of Australia Ltd says it remains on track to deliver cash earnings per share (EPS) growth that meets or exceeds the average of its peers.
In a third quarter trading update the bank said trading conditions and underlying credit growth remained favourable.
"The earnings momentum of the first half has been maintained in the third quarter of the group's 2007 financial year," it said.
During the quarter, CBA said trading conditions in its retail bank business had remained relatively strong, supported by steady housing growth and continuing favourable credit quality.
"In Australia, the retail bank continued to target profitable growth in each of its key products," it said.
Home lending balance growth has been in line with market.
In credit cards, recent growth rates had also been in line with market even though the bank continued to avoid zero rate balance transfer offers.
"Retail deposit growth, which has been influenced by normal seasonal factors, has been in line with system with continuing strong inflows into Netbank Saver," it added.
"Consumer credit quality has remained sound."
CBA said there had been some seasonal increase in arrears.
"Loss rates in unsecured lending - which includes credit cards - are trending slightly below expectations," it added.
The bank also said its institutional banking business had delivered strong balance growth with stable margins and that the global markets and treasury units had performed well.
"The local business banking market remained competitive, however margins have been stable," it said.
"Overall credit quality in the corporate book remains good, although there has been a slight increase in the level of impaired assets."
The wealth management business continued to benefit from a positive investment environment and strong retail funds flows.
Funds under management at March 31 totalled $130.8 billion, up 10.2 per cent for the nine months and two per cent for the quarter.
"It is pleasing to see that our focus on profitable growth is continuing to deliver results," chief executive Ralph Norris said.
"Not only have we maintained the earnings momentum from the first half, but we are continuing to make good progress with our key strategic initiatives.
"With good underlying credit growth and sound credit quality, I remain positive about the outlook and am confident in the ability of the group to again deliver strong earnings per share growth for the full year."
Source : AAP
