Live: CBA reports $10.9b profit, home loan applications down 15pc since May

The second-largest Australian bank, Commonwealth Bank, has announced its annual net profit has reached $10.9 billion. This financial performance is expected to negatively impact the Australian share market as it opens, with optimism surrounding a potential US-Iran peace deal diminishing. While Commonwealth Bank's financials show strength, there are some areas of concern.

Their net interest margin (NIM) has decreased by 0.03 percentage points to 2.05%, indicating increased competition in the mortgage sector. Moreover, operating expenses have risen by 6% to $13.76 billion.

The bank's CEO, Matt Comyn, expressed that growth is slowing down, with higher interest rates and inflation placing uneven pressure on household incomes and economic activity. Furthermore, housing activity has softened from its previous peak. However, application volumes have stabilized in recent weeks. The bank acknowledges that businesses are still grappling with higher input costs and supply uncertainties.

Looking at the broader market, the ASX futures, a key indicator of the market's opening trajectory, have fallen by around 0.4%. The Australian dollar has strengthened slightly to 70.6 US cents, following a weak performance on Wall Street. This decline can be attributed to steep losses for major US tech companies such as Amazon, Alphabet, and SpaceX.

The pessimism among investors is also reflected in the higher oil prices, with Brent crude futures soaring by 1.2% to $88.81 per barrel. This surge in oil prices is attributed to the Strait of Hormuz remaining closed, as the US fails to accommodate Iran's conditions to end the ongoing six-month conflict.