Live: CBA profit rises but late home loan payments edge up

The local share market is in the red, but CBA shares are on the up after lifting its quarterly profit. The bank says interest rates and inflation are biting for some customers, with an increase in mortgage arrears.

Wall Street retreated overnight as higher-than-expected inflation virtually cemented the likelihood of the Fed raising raising interest rates again next month.

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We'll get some lending data out from the ABS shortly, which will show us how investor and owner-occupier lending has been tracking.

But this morning, Australia's biggest home lender Commonwealth Bank has released an update that provides some insight.

The bank reported higher lending volumes over the quarter. Home lending grew 6.6%, while business lending increased 13.6%.

However, home loan application volumes remained 16% down compared to a year earlier.

"Higher inflation and interest rates continue to place uneven pressure on household incomes and business activity," CBA CEO Matt Comyn said.

In a sign of more borrowers starting to struggle, home loan arrears rose by 7 basis points in the quarter, but remain low at 0.8%.

CBA shares are up 0.2% this morning against a falling market.

It's the hot chip spy scandal that has the world talking.

Nvidia CEO Jensen Huang has admitted he cheated on his wife with alleged Chinese spy Alice Huang (no relation), an executive at Singapore-based data centre company Megaspeed.

The AFR and other online sites yesterday had pictures and video of CEO of data centre operator NEXTDC Craig Scroggie next to Alice Huang.

There is no suggestion that he has any links to the scandal, just that the footage exists.

We contacted NextDC and got this response:

"NEXTDC has no links whatsoever with Megaspeed or anyone at that company."

Australians could be earning less interest on their savings than they expect, with ASIC urging consumers to check they are receiving the rate they have been promised by their bank.

Australians have almost $1.8 trillion in household deposits, but the conditions attached to higher savings rates can be difficult to understand.

ASIC warned that introductory, welcome and bonus interest rates can come with conditions or only apply for a limited time.

He said consumers should not assume they are guaranteed the highest rate advertised by their bank.

"Higher advertised rates may only apply for a limited time or may depend on the customer meeting certain conditions," he said.

"Consumers should check what conditions apply, whether they are meeting them and whether their bank is paying the interest rate they have been promised."

The ASX 200 has opened lower following a retreat on Wall Street overnight.

At 10:10am, the ASX 200 was down 0.3% to 9,103 points. The All Ordinaries was down a similar amount.

Among the sectors, retailers are leading the pack, while the miners are being sold off.

Despite market bets on a de-escalation in the Iran war, new evidence has emerged in recent days of strikes on tankers in the Strait of Hormuz and on energy infrastructure in the Middle East.

Crude prices are at two-month lows after US officials downplayed the need for additional military action against Iran, with analysts noting President Donald Trump's more conciliatory tone since the Republicans' defeat in the November 3 midterm elections.

Key global benchmarks continued to slide this morning. At 9:45am AEDT:

However, there is little sign of attacks abating in November, after 37 ships were attacked in October, the highest monthly total since the start of the war, according to data from the Washington Institute for Near East Policy.

One of the exemplars of the crisis-in-confidence surrounding the AI sector, CoreWeave, has at last enjoyed some good news, beating analyst estimates in its quarterly earnings update.

CoreWeave reported revenue of $US3.66 billion for the third quarter ended September, up from $US1.37 billion a year earlier, compared with analysts' average estimate of $US3.55 billion.

The improvement was driven by strong demand for its cloud services, easing recent concerns around the durability of AI infrastructure demand amid its mounting debt load.

The company's shares were up more than 7% in extended trading following a sharp slump last month.

CoreWeave's stock has crashed more than 40% in the past month as the company emerged as the focal point of growing fears about a potential AI bubble, with investors fretting about heavy borrowing to fund purchases of chips, land and energy for AI data centres that generate little return until they are leased.

The $27 billion Nvidia-backed AI cloud company has never turned a profit, according to data compiled by LSEG, and had more than $50 billion in debt as of June.

I think Phillip needs to refresh his Duck identification skills.

There's been a fair bit of, quite literally, animated ornithological debate this morning re the duck — yes, it's Daffy not Donald

Macquarie Bank says it will not contest the ASIC proceeding and is expected to pay a $14 million civil penalty.

It said the ASIC announcement related to products offered on its website between December 2021 and September 2022.

It said the bank would admit to a contravention of its obligation to ensure it provides financial services efficiently, honestly and fairly.

"Macquarie's website offered a Welcome Rate on its Macquarie Savings Account," the bank said in a statement.

"The matter arose because, when standard variable rates increased and exceeded the Welcome Rate, customers were instead paid the higher standard variable rate though some expected a bonus margin over that rate.

"Macquarie acknowledges that some of the wording on its website was not sufficiently clear and may have caused confusion."

Macquarie's head of banking and financial services Ben Perham said the bank's customers had high expectations of it, "and although ASIC has acknowledged our actions were not deliberate, we should have better explained on our website how the Welcome Rate would be applied and we apologise for any confusion caused".

"We received some customer complaints regarding the description of the Welcome Rate on our website, and we elected to pay $8.8 million in compensation to put customers in the position that they would have been if the Welcome Rate was a fixed bonus interest margin," he said.

"Additionally, we have conducted a thorough review of all product descriptions we use across our website."

ASIC commissioner Alan Kirkland said "banks must get the basics right, which includes having systems and processes that deliver on the promises they make to customers".

"This wasn't just unclear wording," Mr Kirkland said.

"Macquarie's systems and controls were not rigorous enough to identify the risk that customers would misunderstand how the Welcome Rate worked.

"At a time when Australians are contending with cost-of-living pressures, consumers deserve clear information about savings rates and the financial benefits they are promised."

The proposed resolution is subject to the court's approval.

David Jones administrator McGrathNicol has given the beleaguered department store's creditors until next Monday to submit their proofs of debt.

The callout, which was sent out with a swaddle of documents late yesterday afternoon, is likely to see thousands of small to large businesses come forward with claims, from fashion brands to major landlords.

It's all ahead of the first creditors meeting next Tuesday, which will be held remotely.

There's also now just days left for other entities to put in expressions of interest to buy David Jones, with McGrathNicol already talking up interest in the 188-year-old Australian retailer.

We intend to lodge an application with the NSW Supreme Court to extend the convening period, providing additional time to undertake a sale and/or recapitalisation process for David Jones Group.

If the convening period is extended, the Administrators’ report to creditors and the second meeting of creditors will be held at a later date. We will write to creditors providing further details of any extension that is granted by the Supreme Court.

Yesterday, ABC News confirmed that David Jones was up to date with its superannuation payments to its 6,000 employees, in line with new "pay day" laws that started in July.

Are you a creditor to David Jones? Do you know more about what's happening behind the scenes? Email our journalist confidentially on terzon.emilia@abc.net.au or em.terzon@proton.me.

Macquarie Bank has admitted to failures in the promotion of its "welcome" interest rate for new savings account customers.

The bank has admitted to breaching the Corporations Act and could face a $14 million penalty in proceedings brought by ASIC.

Macquarie described its welcome rate as a "welcome variable rate" and a "bonus", which ASIC alleges could lead customers to believe it was paid on top of the standard variable rate.

In fact, the welcome rate generally operated as a fixed rate that applied instead of, rather than in addition to, the standard rate during the four-month promotional period, the regulator said.

The penalty, which the parties have jointly proposed to the NSW Supreme Court, comes in addition to $8.8 million in remediation initiated by Macquarie, which has already been paid to nearly 40,000 customers.

The final numbers are in for Wall Street's session, with all key indices dragged down by inflation numbers that reinforced expectations the Federal Reserve will hike interest rates again soon.

The tech-centric Nasdaq shed 0.7%, after falling as much as 1.7% in early-afternoon trading, while the Dow Jones Industrial Average and the benchmark S&P 500 closed down 0.3% and 0.4%, respectively.

US 10-year Treasury yields jumped to 4.99%, while the US dollar jumped around 0.7% versus a basket of key currencies.

The CBA has posted a flat Q1 earnings update.

The bank's unaudited cash post tax profit came in at $2.8 billion, flat versus the quarterly average for the second half of FY2026, but up 8% on the corresponding quarter last year.

Operating income rose by 3% driven by lending and deposit growth, while operating expenses also rose by 3% due to wage and IT costs.

Loan impairment charges were also higher.

An impairment expense of $300 million (or 11bps of total loans) was booked. Collective provisions increased by $105 million over the quarter, but the bank says credit quality remains sound.

Home loan arrears also ticked higher by 7 bps ,which the bank says reflects cost-of-living pressures from higher inflation and interest rates.

Corporate troublesome and non-performing loan exposures were slightly higher at $6.9 billion, or around 1% of total loan exposures.

Morning Phillip, yes quite right. See earlier comment from Tom. I will pass on your comment to our GIF unit who spend hours overnight curating the morning's offerings.

Phillip: Morning Stephen. I wish we could stick with Donald Duck to open the blog each morning. Poor old Donald is the epitome of the average person. Tries hard , has no particular unique skills , looks like he is about to have a win after much effort , only to be crushed by something he has no control over (Bugs Bunny , RBA, government policy , etc.etc. ) time and again.

Hi Stephen, US markets don't close till 8AM due to daylight savings these days! Also query your LME Copper price Quote - are your figures yesterday's prices, as US Cu fell from 6.38 lb to 6 .27 ib overnight (nearly 2%) ? Thanks Tom

Yes, thanks Tom — went a bit early on the close. We will update when final figures land. BTW, you are correct about my education/qualifications. Should have stuck to farming.

Anthropic's blockbuster IPO will value the Claude chatbot creator at up to $US1.4 trillion ($2.0 trillion), slightly short of some investors' expectations, setting up a key test of Wall Street's faith in the AI boom it helped ignite.

The company is kicking off the roadshow for a share sale expected to set a benchmark for the sector, following years of hype that fuelled a massive influx of capital into AI companies and sent the US stock market to all-time highs.

Anthropic's owners are ploughing ahead despite a recent sell-off across the tech landscape, as investors question whether the AI boom's returns will justify the massive spending and mounting debt costs in an elevated interest-rate environment.

The AI lab and some of its existing shareholders are aiming to raise up to $US64.4 billion ($93.8 billion) in the IPO by selling 825 million shares priced between $US70 and $US78 each. Shares are expected to start trading on the Nasdaq on November 19.

Anthropic will also raise $US26 billion ($37.9 billion) via a separate private placement deal with cornerstone investors, including Alphabet's Google, Nvidia— whose CEO is subject to a probe over his affair with an alleged Chinese spy — and Advanced Micro Devices.

The IPO is the year's most closely watched since Elon Musk's SpaceX, which raised $US75 billion ($109.2 billion) at a nearly $US1.75 trillion ($2.6 trillion) valuation in June.

Investors are raising concerns over the sustainability of the investment cycle, particularly around how quickly companies can turn their investments into revenue.

At the top of the price range, Anthropic would be valued at about $US1.4 trillion on a fully diluted basis, which includes securities such as stock options and restricted stock. On a non-diluted basis, excluding those securities, Anthropic's market value would be about $US1 trillion.

Higher than expected inflation not only took the wind out of Wall Street's rally, it blew the markets backwards as betting firmed on a rate hike from the Fed next month.

Interest rate markets have now fully priced in a hike at the Fed's December meeting after the US CPI came it at 0.4% growth in October, compared with expectations of 0.3%.

It's the third consecutive month of inflation coming in at 0.4% or above. It was 0.6% in September.

The negative sentiment was reinforced by two senior (voting) Fed members openly talking about the need to raise rates, putting the idea of a 50bp hike in traders' minds.

That sent US bond yields and the US dollar higher, while the Aussie dollar fell almost 1% to 68.63 US cents.

Futures trading points to the ASX 200 falling around 0.5% today after yesterday's solid 1.1% rally.

On Wall Street, tech stocks were again under pressure.

The S&P 500 technology sector dropped around 1% as the worst performing of the 11 major sectors, weighed down by another drop in Nvidia, which fell more than 5% and has tumbled about 10% over the past two sessions.

The company's stock reflects mounting concerns over CEO Jensen Huang's future at the chip company after it initiated an internal probe into spy claims involving Chinese businesswoman Alice Huang.

Investors are also bracing for Anthropic's expected public listing later this month.

The AI lab revealed that its initial public offering is expected to raise as much as $US64.4 billion, giving the company a fully diluted valuation of up to $US1.4 trillion.

A listing by Anthropic could also force other AI heavyweights to compete harder for investor dollars.

On commodity markets, gold fell almost 3% on the inflation data release while oil prices eased further to a two-month low.

Good morning, and welcome to another day on the ABC markets and finance blog.

Stephen Letts from the ABC business team here, limbering up for a blow-by-blow coverage of the day's events, where every post is hopefully a winner, but none should be construed as financial advice.

Wall Street retreated overnight as hotter-than-expected inflation shortened the odds of the Fed raising rates in December.

The ASX looks like giving up a large chunk of yesterday's gains. Futures trading is pointing to a 0.5% fall on opening (at 7:00am AEDT).

The game's afoot, so let's get blogging.