Commonwealth Bank of Australia (ASX: CBA) has seen its share price fall 1%, despite the market being up today, after reporting flat profit growth for the September quarter.

CBA’s share price was trading at $71.81 in mid-morning trading.

Here are the highlights of the quarterly update:

  • Unaudited cash earnings of ‘approximately’ $2.4 billion – flat compared to last year
  • Operating income growth slightly below that of the previous year’s quarter, impacted by low interest rates, a strengthening Australian dollar and higher insurance claims.
  • Group net interest margin (NIM) was lower due to higher funding costs – which is one reason why the banks didn’t pass on all of the RBA’s 0.25% interest rate cut in August 2016.
  • Troublesome and impaired assets were up 3% to $6.8 billion – mainly due to ongoing stress in the New Zealand dairy sector.
  • The mining downturn continues to impact on consumer loan impairment particularly in mining states Western Australia and Queensland, which was higher in the quarter at $322 million.

The good news is that there were no real shocks or surprises in the bank’s update, but combined with recent updates from Australia and New Zealand Banking Group (ASX: ANZ), National Australia Bank Ltd (ASX: NAB) (here) and Westpac Banking Corporation (ASX: WBC) (here), indicates the big four are doing it tough.

That likely means flat or lower dividends ahead as a result of flat or very low earnings growth, and will likely flow through into their share prices. If you expect the banks to thrash the overall market in the short-term, you’re mistaken.

Foolish investors might be better off diversifying their portfolios beyond the top 10 usual suspects held in most self-managed super funds and retail investors’ portfolios.

Is it time to sell your CBA shares as well as these three companies?

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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.