Highlights:
- Profit and Dividend Increase: Commonwealth Bank of Australia (ASX: CBA) reported a full-year net profit of $9.83 billion, slightly below last year’s $10.2 billion but above analyst expectations. The bank declared a final dividend of $2.50 per share, raising the total annual dividend to $4.65, up from $4.50 in the previous year.
- Economic Concerns and Outlook: CEO Matt Comyn highlighted concerns about the Australian economy, including housing affordability and productivity issues. The bank expects rising unemployment and potential decreases in the cash rate in the latter half of 2024 as interest rates impact economic growth and inflation.
- Customer and Loan Performance: CBA reported a 23% increase in housing costs since December 2019. The bank’s customer base shows a high concentration of younger borrowers with significant mortgages. Loan arrears have increased slightly, with 1.3% of loans 30 days past due, but loans 90 days overdue remain stable at 0.65%. The bank's net interest margin has improved slightly despite competitive pressures.
Commonwealth Bank of Australia (ASX: CBA) Reports $9.83 Billion Profit Amid Economic Concerns
Commonwealth Bank of Australia (ASX: CBA) has announced a full-year net profit of $9.83 billion, surpassing analyst expectations despite a decrease from last year’s $10.2 billion. The bank's cash earnings exceeded the forecasted $9.7 billion, demonstrating resilience amid a challenging lending environment.
Key Points:
- Profit and Dividends: CBA’s second-half cash profit was $4.8 billion, close to the $5 billion recorded in the first half. The bank declared a final dividend of $2.50 per share, bringing the total annual dividend to $4.65, up from $4.50 the previous year.
- Economic Outlook: CEO Matt Comyn expressed concerns about Australia’s economic outlook, highlighting issues such as housing affordability and productivity. He noted that while the economy remains resilient with low unemployment, higher interest rates are slowing growth and moderating inflation. CBA anticipates a rise in unemployment and a potential decrease in the cash rate in the latter half of 2024.
- Customer Base and Loan Performance: CBA observed a 23% increase in housing costs since December 2019. The bank’s customer base is skewed towards younger borrowers with high mortgages, contrasting with older customers who have more deposits. Home loan arrears have increased slightly, with 1.3% of loans 30 days past due, though loans 90 days overdue remain stable at 0.65%. CBA's net interest margin has risen slightly, reflecting stable performance amidst competitive pressures.