CBA Dividend Higher Despite End To Profit Run
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So much for all the hype about how the banking royal commission and the Austrac money laundering claims would hurt the Commonwealth Bank and threaten shareholders returns.
They haven’t, is the short answer.
In fact it was lower bad loan impairment costs, rising interest income from repricing home loans and cost controls that helped the CBA in the year to June 30.
The Commonwealth Bank in fact posted a full-year cash profit of $9.23 billion, down 4.8% from 2016-17 (after ignoring a series of one off costs).
Revenue rose 2.6% to $25.9 billion from continuing operations (that is ignoring any contributions from the insurance businesses).
Final dividend was lifted one cent a share to $2.31 after the interim from also lifted by a cent a share to $2 a share, making for a total for the year of $4.31.
The bank said its net interest margin was 2.15%, up 5 basis points and thanks to the ending of the boom in fixed interest home lending which saw the bank reprice many investor home loans.
Operating expenses of $11.6 billion, up 9.2%, and largely due to the AUSTRAC civil penalty of $700 million.
Loan impairment expense of $1.079 billion, down 1.5%, equivalent to 15 basis points of gross loans and acceptances.
Between this savings and the rise in the net interest margin, the CBA had 20 basis points (or 0.20%) to play with and add to the bottom line.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.