Cba Just Delivered Another $2.8 Billion Quarter. Would I Buy The Bank's Shares?

Commonwealth Bank of Australia (ASX: CBA) shares are having a difficult session on Wednesday.

The banking giant's shares are down around 1% following the release of its first-quarter trading update.

However, the broader market is also trading lower after a weak session on Wall Street overnight.

So, are CBA's results a reason to be cautious, or would I take the opportunity to buy?

What did CBA report?

For the three months ended 30 September, CBA reported an unaudited cash profit of approximately $2.8 billion.

That represents an 8% increase on the prior corresponding period, although earnings were flat compared with the average quarter during the second half of FY26.

The bank also reported operating income growth of 3%, supported by continued growth in lending and deposits.

Overall, I think that's a respectable performance, although there are some areas of concern.

What could be worrying investors?

One potential negative is the deterioration in mortgage arrears. CBA revealed that home loan arrears increased by seven basis points during the quarter to 0.80%.

Management attributed the increase to cost-of-living pressures from higher inflation and interest rates, alongside slower resolution of some overdue loans.

The bank also recorded $300 million in loan impairment expenses, up from the $234 million quarterly average during the second half of FY26.

I think investors will understandably be watching this closely. If more borrowers struggle to meet their repayments, CBA could face higher credit losses, putting pressure on earnings.

However, the bank's overall credit quality remains sound, and I don't think these developments undermine its long-term investment prospects.

Why I'd buy CBA shares

For me, the biggest positive from today's update is that CBA continues to demonstrate why it deserves its reputation as Australia's leading bank.

Its enormous customer base, strong brand, and investment in technology give it advantages that I believe competitors will struggle to replicate.

And the latest figures suggest those advantages are helping it attract business. For example, CBA's business lending increased 13.6% over the 12 months to September, growing approximately 1.3 times faster than the broader market.

I think that's impressive and demonstrates the bank's ability to take market share in an attractive area of the banking industry.

Its home lending business also performed well, growing 6.6% over the year, while household deposits increased 7.7%.

Importantly, CBA achieved this growth while maintaining a broadly stable underlying net interest margin during the quarter.

I think that's encouraging because it shows the bank is continuing to grow its lending business without a significant deterioration in the profitability of those loans.

I'm also impressed by its financial strength. Customer deposits account for 79% of total funding, while its common equity tier 1 capital ratio stood at 11.5%, comfortably above regulatory requirements.

For me, these qualities help justify CBA's premium valuation relative to its major banking rivals.

Foolish takeaway

I think today's results reinforce my positive view of CBA shares.

There are some concerns around mortgage arrears, and the shares certainly aren't cheap. However, I believe CBA remains the highest-quality bank on the ASX, with plenty of opportunities to keep growing its earnings over time.

The post CBA just delivered another $2.8 billion quarter. Would I buy the bank's shares? appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has positions in Commonwealth Bank Of Australia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.