Commonwealth Bank of Australia shares jumped nearly 6% to A$169.0 after the nation's largest lender reported record half-year cash earnings of A$5.45 billion ($3.86 billion). The strong performance boosted the ASX 200 by 0.7%, with CBA's peers also gaining ground. Westpac, ANZ, and National Australia Bank rose between 1% and 3% in morning trade.

CBA's home and business lending volumes increased sharply alongside overall deposits, though its net interest margin fell 4 basis points to 2.04% as lower interest rates compressed profitability. The bank also reported higher expenses during the six-month period as it invested in technology infrastructure, including artificial intelligence initiatives. These investments aim to modernize operations and improve efficiency.

While the Reserve Bank of Australia cut rates in 2025, inflation resurged in the second half of the year, prompting the central bank to hike rates for the first time in two years in February. The RBA warned of potential further increases if inflation remains sticky. Higher rates could boost CBA's lending margins but may also dampen lending activity, creating a mixed outlook for the lender's future performance.