Storms in Melbourne and Perth have dampened profit expectations for Commonwealth Bank’s general insurance operations, but losses aren’t expected to affect the larger group.

CommInsure last week reported a 3.1% lift in premiums to $1.5 billion in the first quarter of this year, with reinsurance containing larger losses caused by hailstorms earlier this year.

The bank is posting unaudited cash earnings of $1.5 billion for the first quarter, buoyed by strong retail growth and a “stabilisation” within its banking and markets unit.

Commonwealth Bank CEO Ralph Norris says the result could have been stronger if not for slow credit growth, high funding costs and price competition.

“While we have clearly passed the peak in the bad debt cycle, key credit quality indicators remain at elevated levels and we continue to expect gradual, rather than dramatic improvement,” Mr Norris said.

A full profit result will be released in the next few weeks.