Commonwealth Bank shareholders will get a slightly higher final dividend after the country’s biggest bank revealed an 11% rise in cash earnings for the year to June 30.
Cash net profit after tax was $9.60 billion for the twelve months to June 30, compared with $8.65 billion in 2020-21.
It declared a final dividend of $2.10 per share, compared with $2.00 last year.
That took the total for the year to June to $3.85 a share with the higher interim of $1.75 a share ($1.50 previously).
That’s still a long way under the record $4.31 a share paid for the 2018-19 financial year
The bank said its net profit after tax “was supported by operational performance and volume growth in core businesses as well as sound credit quality and the reduction of provisions related to the uncertainties associated with the impacts of the COVID-19 pandemic.”
The bank’s net interest margin fell 18 points to 1.90%.
“Group NIM declined due to a large increase in low yielding liquid assets and lower home loan margins,” the bank explained in Wednesday’s release.
But this will be a temporary situation with the CBA predicting that “margins (are) expected to increase in a rising rate environment.”
Operating expenses fell 1.5% over the year – news that investors should welcome after taking fright at the National Australia’s Bank warning of higher costs in its year to September 30 update on Tuesday.
Revenue rose just 1% to $24.38 billion.
No worries about bad debts or doubtful loans with the CBA revealed that its loan impairment expense fell $911 million to a benefit of $357 million for the year to June “driven by reduced COVID-19 overlays partly offset by increased forward- looking adjustments for emerging risks including inflationary pressures, supply chain disruptions and rising interest rates.”
