CBA slightly beats estimates

‘Lower for longer’ versus ‘plateauing’ house prices and bad and doubtful debts; these are going to be the issues for all banks heading into FY15 and CBA is no expectation. On first blush the FY14 numbers are, as ever, a class above. 

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Key findings

- Cash earnings continue to grow in highly competitive environment
- Margins higher on funding mix as bad and doubtful debt contracts
- Forward expectations cautious as investment in materials and energy slows

Net interest margins even in this highly competitive market have managed to increase to 2.14%, as CBA sees retail funding outpacing expectations and wholesale funding costs falling. This saw the bank’s preferred measure of cash earnings beating the street, if only slightly, as housing demand picked up seeing CBA lending $130 billion in housing and business loans.

CBA

Cash profit

Earnings per share

Expected

A$8.64 billion
A$5.27

Actual

A$8.680 billion
A$5.350


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