CBA points to improvements in economy

Bad debts have reached their peak the Commonwealth Bank of Australia (CBA) claims, as more people make use of its monetary assistance services.

An increasing number of people are taking advantage of the financial assistance services on offer from the Commonwealth Bank of Australia (CBA), it has been revealed.

Pointing out towards a rise in customer take-up of such a programme, the financial services firm indicates that arrears have remained largely stable during the third quarter of this year.

It was also revealed that there were slight improvements in the amount of money issued to consumers through CBA and Bankwest home loans, while "a continued prudent approach to wholesale funding" is taken.

Meanwhile, an improvement in the firm's credit card portfolio was also noted, as credit quality trends were deemed to generally be moving in line with expectations

However, the bank - which includes the Commonwealth Gold credit card in its range of products - points out that in spite of some improvements in its group net interest margin, are a number of challenges remain.

This is particularly the case in regards to bank deposits, where margins are stated to be under pressure.

Such comments come as Australian banking figures from the firm indicate that cash earnings for the three-month period stood at $1.4 billion.

CBA chief executive officer Ralph Norris points out: "Whilst the economic outlook has improved since our results in August, the pace and extent of the recovery remains unclear. We will therefore continue to retain our conservative business settings until such time as a sustained improvement is evident."

He adds that although it is likely that the level of bad debts have reached their peak some of the bank's "customers are continuing to face financial hardship".

Such comments come as the bank announced last week that rates across its range of variable home loans and deposit accounts were to rise following the Reserve Bank's decision to increase interest rates to 3.5 per cent.