News: NAB UPDATE 1-CBA quarterly profit drops 16% as record-low rates hit margins

(Adds details on results, background)

Nov 11 (Reuters) - Commonwealth Bank of Australia (CBA) (CBA) said on Wednesday its first-quarter cash profit fell 16% as record-low interest rates squeezed margins at the country's biggest lender.

The banking sector has been under pressure as the COVID-19 pandemic forced the central bank to slash record low interest rates further, while the country slipped into recession for the first time in three decades.

CBA said its quarterly net interest margin - the difference between interest earned from lending and paid for deposits - fell from the second half of fiscal 2020. However, the bank did not disclose the figure.

Cash net profit after tax, which excludes one-offs and non-cash accounting items, dropped to A$1.80 billion ($1.31 billion) in the three months ended Sept. 30, CBA said.

The country's "Big Four" lenders have looked to safeguard their profit by not lowering rates for variable rate mortgage holders, the bulk of their home loan customers, even after the Reserve Bank of Australia cut rates.

Common equity tier 1 ratio was 11.8% at the end of September, up from 11.6% at June 30, partly helped by funds the lender received from the sale of its Australian life insurance business.

Impaired and other troublesome assets fell to A$8.40 billion, from A$8.70 billion as of June-end.

CBA said the number of home loans still in deferral were down to about 46,000 as at Oct. 31, compared with 125,000 at the end of June.

($1 = 1.3740 Australian dollars)