Owning Commonwealth Bank of Australia (ASX: CBA) shares has been a pleasing choice for earnings growth over the last 30 years – it has been an excellent long-term performer.
The ASX bank has a closer connection with customers than many other banks, as shown by its high percentage of loans originated through proprietary channels. In other words, it doesn't rely on brokers for most of its loan flow.
I think its ability to connect with customers, including winning many new customer transaction accounts each year, is key to the bank continuing to grow strongly while also achieving a good profit margin.
Let's look at what's expected of the ASX bank share in the coming years and how much it could grow earnings.
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FY26
The 2026 financial year has nearly finished for Commonwealth Bank, but it'll still be a month or so until we hear how the company has performed in the period to June 2026.
The projection on Commsec suggests that CBA's earnings per share (EPS) could rise in FY26. The independent forecast implies that the business could generate $6.54 of EPS for the financial year. At the current CBA share price, it's valued at close to 25x FY26's estimated earnings.
The latest update from the bank was for three months to 31 March 2026. It reported statutory net profit of $2.6 billion, while cash net profit was $2.7 billion – this was up 4% year-over-year, but down 1% on the quarterly average of the FY26 first half.
Impressively, the bank reported excellent growth in both loans and deposits. Annual growth to March 2026, business lending grew 12.5% (1.2x the overall loan system), household deposits grew 9.1% (1.1x the banking system), and home lending increased 7.1% (1x the loan system).
One of the main negatives of that result was a $316 million loan impairment expense, with higher collective provisions reflecting "heightened geopolitical and macroeconomic uncertainty". Its underlying portfolio credit quality remained "sound".
The higher RBA cash rate can help CBA earnings because it means it can lend out money from balances that CBA doesn't pay interest on (namely transaction accounts) at a higher loan interest rate. However, the higher rates also come with a higher risk of loan defaults by borrowers.
Pleasingly, the bank's lending growth has been strong enough to drive year-over-year earnings higher.
Can it continue to deliver good growth amid the Federal budget changes to negative gearing and capital gains tax?
Let's look at the profit forecast for next year.
FY27
According to the projection on Commsec, the business could grow EPS by (just) 2.7% in FY27.
Earnings growth is essential to push the CBA share price higher over time, but 2.7% growth is not exactly exciting. Higher profit can also help fund larger dividend payments from the ASX bank share.
According to that forecast for FY27, the business is valued at 24x FY27's estimated earnings.
It's a great bank, but there are many other ASX shares that could grow earnings faster and trade at more attractive valuations.
