CBA share price opens higher, 98 cent final dividend declared
We examine the highlights from Commonwealth Bank of Australia’s full-year (FY20) results.
The Commonwealth Bank of Australia (CBA) saw its share price rise modestly after the biggest of the big four banks reported its full-year (FY20) results to the market.
Here, CBA reported stronger statutory profits, impressive volume growth across its lending portfolios, and a final dividend of 98 cents per share, down 31% year-over-year.
Despite a lower dividend, the stock was bid higher at the open, rising some 2.6% to $76.64 per share – within the first 15 minutes of trade. By the afternoon however the stock traded lower, sitting at $74.22 per share as of 12:44pm (AEST).
CBA share price: Full-year results unpacked
On the top line, the bank reported total income of $23,761 million – with net interest income continuing to be the major profitability driver – at $18,610 million.
From an earnings perspective, CBA reported a statutory NPAT of $9,634 million (+12.4%), a cash NPAT of $7,296 million (-11.3%) and earnings per share (EPS) of 412.5 cents.
This all comes as the bank’s volume growth remained robust – partly offsetting margin decline. Here, the bank reported that home lending grew 1.3x the system (+$18.4 billion), deposits grew 9.8% (+$25.0 billion), while business lending rose by $7.0 billion.
In spite of that growth, net interest margins (NIMs) remain under pressure as a result of historically low interest rates – with NIMs down 2 basis points year-over-year and 7 basis points on a half-on-half basis.
Commenting on these results, Mr Comyn, said:
'The strength of our core banking businesses, combined with strong operational performance, has delivered good outcomes for our customers and shareholders – despite the challenges presented by lower interest rates and COVID-19.'
Finally, as a result of the coronavirus pandemic, CBA also raised its loan loss provisions, with the bank taking a $1.5 billion credit provision across its lending portfolios. Provisions now total $6.4 billion.
'We continue to monitor our lending portfolios closely and reassess our provisioning levels as the situation around COVID-19 evolves,' it was pointed out.
A dividend at the top-end of consensus
Heading into the full-year, much was being made of CBA’s dividend in light of APRA’s recent directive that deposit taking institution’s dividend payouts should not exceed 50% of earnings. This led to much speculation about the quantum of CBA’s final dividend, given that the bank had already paid out a 200 cents per share dividend in March.
The bank ended that speculation today – revealing a 98 cents per share dividend – equal to 49.95% of H2 statutory earnings. This takes CBA’s full-year dividend to 298 cent per share
Describing its approach to capital management as ‘cautious’, the bank said that the final dividend 'reflects APRA's recently updated guidance (which applies until the end of the calendar year) that the banks should retain at least 50% of earnings.'
CBA will trade ex-dividend on 19 August.
Want to take a position in CBA, long or short?
Create an IG trading account or log in to your existing account to get started now.
The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.
Act on share opportunities today
Go long or short on thousands of international stocks with CFDs.
- Get full exposure for a comparatively small deposit
- Trade on spreads from just 0.1%
- Get greater order book visibility with direct market access
See opportunity on a stock?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Take your position
- See whether your hunch pays off
See opportunity on a stock?
Don’t miss your chance – upgrade to a live account to take advantage.
- Trade a huge range of popular stocks
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See opportunity on a stock?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.