But it also pointed out a concerning problem with bad loans while it still has about 25,000 of its customers on loan deferrals.

Its bad loan impairment was $882 million, up from $649 million for the same period last year. The total of its “troublesome and impaired assets” was $8.19 billion.

The CBA said the impairment was made because of the uncertain economic outlook and emerging industry risks for aviation and entertainment, leisure and tourism sectors.

However, chief executive Matt Comyn said the bank’s balance sheet was the strongest it had ever been.

“We are starting to see a turnaround in economic conditions which is, of course, very good news looking forward,” Comyn said.

He said the 20 per cent reduction in the bank’s net profit was largely because of a one-off gain from the sale of its CFS Global Asset Management business that lifted last year’s result. Excluding that, its cash profit was down 10 per cent.

“Now if we exclude the impacts from COVID, particularly loan impairment and higher expenses, broadly we see that our cash net profit after tax is flat, which given the overall operating context, I think is a good result,” he said.

The CBA also faced lower credit card, foreign exchange and deposit fee income while reduced demand for hedging impacted its global markets income.

But there were also encouraging signs. Its business lending was up $4 billion, home lending up $13 billion and household deposits grew by $23 billion, although it said the loan interest rate environment would continue to put pressure on its revenue.

CommSec also did well because of increased trading volume and there were lower insurance claims related to weather events, mainly bushfires.

“Although the outlook is positive, there are a number of health and economic risks that could dampen the pace of recovery,” the bank said.

“Australia is relatively well-positioned having started from a position of fiscal and economic strength.

“We have a solid pipeline of infrastructure projects, the outlook for mining and agriculture exports is strong and the community has benefitted from the Government’s significant income support measures.”