The Commonwealth Bank of Australia (OTC:CMWAY) (CBA) has announced a strategic shift in its approach to the home loan market, which resulted in an A$4.5 billion ($2.9 billion) reduction in its home loan book during the September quarter. Despite this intentional move away from aggressive competition tactics, the bank’s margins have stabilized, and its shares saw an uptick in morning trading today.

Analysts have recognized CBA’s performance positively, with E&P Financial commending the bank on its net interest margin outcomes and the stabilization of home loan margins. This comes at a time when other major Australian banks like ANZ, Westpac, and National Australia Bank (OTC:NABZY) are experiencing margin pressures due to interest rate hikes that began in May of the previous year.

In its financial update for the quarter, CBA reported a cash profit of A$2.5 billion ($1.6 billion), surpassing consensus estimates by 3%. The bank’s disciplined pricing strategy has allowed it to grow its mortgage book at 0.7 times the rate of the overall industry. This growth is significant given that CBA holds sway over a quarter of Australia’s A$2 trillion mortgage market.

Furthermore, CBA has set aside smaller-than-anticipated provisions for potential loan impairments, a move that reflects confidence in its ability to manage credit risks effectively amidst economic uncertainties.

Investors and market watchers have taken note of CBA’s performance as it navigates through the challenging environment with a focus on sustainable growth and profitability.