News: CBA UPDATE 1-Commonwealth Bank of Australia third-quarter profit rises on lending strength

(Updates with details on margins, home and business lending volume growth)

May 9 (Reuters) - Commonwealth Bank of Australia (CBA) on Tuesday reported an 8.3% rise in third-quarter cash earnings, as higher volumes in business and home lending portfolios offset the impact from stiff competition.

Australian banks over the past year have enjoyed higher margins owing to aggressive monetary tightening by the central bank to contain runaway inflation, boosting banks' earnings and asset quality.

However, their strong run of high profits and stock market outperformances faces hurdle as higher funding costs and a cooling economy augurs slower credit growth and more bad debt.

CBA did not disclose its quarterly net interest margin - the difference between interest earned from lending and paid for deposits - but said continued competitive pressure in home loan pricing and customers switching to higher yielding deposits impacted its margins.

Its quarterly home lending balance jumped A$6.90 billion from December-end, while business lending grew A$2.6 billion, CBA said.

The country's biggest lender said cash net profit after tax was about A$2.60 billion ($1.76 billion) for the three months ending March 31, marginally beating the consensus estimate of A$2.58 billion by Visible Alpha, according to Citi.

The company reported A$2.40 billion in cash net profit after tax a year earlier.

($1 = 1.4743 Australian dollars) (([email protected]; Twitter: https://twitter.com/sameer_manekar))