Commonwealth Bank of Australia (CBA) says price competition for retail deposits continues to have a negative impact on margins at its New Zealand subsidiary, ASB. CBA made the comment in its March quarter trading update. The bank also said ASB was maintaining its strong relative market positioning in both home lending and deposits and that the New Zealand economy continued to show signs of improvement. CBA added that ASB's consumer arrears were stable. Separately, CBA said its unaudited cash earnings for the three months to March were approximately A$1.5 billion, up 30% from A$1.15 billion in the same period of last year. Chief executive Ralph Norris said while the bank had clearly passed the peak of the bad debt cycle, key credit quality indicators remained at "elevated levels" and CBA continued to expect gradual, rather than dramatic improvement. Group impairment charges were about A$500 million, down from A$630 million in the first three months of 2009.
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