While the June 30 reporting season adds another gear this week, all attention will be on the full year figures from the Commonwealth Bank on Wednesday and what CEO, Ian Narev and chair, Catherine Livingston say about last Thursday’s sensational money laundering allegations levelled against the bank by the financial intelligence group, Austrac.
Investors on Friday sold off CBA shares as further details emerged of the scope of the civil case being brought against the bank by Austrac, with claims the bank’s smart ATMs were used by a number of drug and other criminal groups, some of whom are now in jail.
CBA shares dropped a sharp 3.9% on Friday to drag the ASX 200 Index down 0.25% to 5720.6 points at the close the session. The bank’s market value fell by more than $5 billion.
In a short statement after midday on Friday, CBA noted the Austrac action in an ASX announcement that said the bank would be filing a defence in the matter.
“We are currently reviewing Austrac’s claim and will file a statement of defence," CBA said in the statement.
“We will keep the market informed of any updates in compliance with our disclosure obligations,” The bank said. the bank said nothing on Thursday afternoon after Austrac revealed the action.
Analysts are expecting the Commonwealth to report a record net profit of more than $9.8 billion and a total dividend for the year of $4.22 a share after paying a steady interim of $1.99. The final looks like being around $2.23 to $2.25.
The CBA’s report will come two days after the NAB provides its third quarter trading update this morning.
More than a dozen other companies will report this week – Cochlear, AMP, News Corp, 21st century Fox, Transurban, Magellan, Nick Scali, REA Group, IOOF, AGL, Orora, and Virgin Australia. James Hardie holds its AGM in Dubin.
The AMP’s Chief economist, Dr Shane Oliver says “2016-17 profits for the market as a whole are likely to have increased by around 18%, driven by a huge 135% gain in resources profits on the back of the rebound in commodity prices.”
“Profit growth for the rest of the market is likely to be around 5.5% led by retailers, utilities, healthcare stocks and financials.
“As always in a low interest rate world dividends will be a key focus, but the key to watch will be on outlook statements as the current financial year won’t have a repeat of the huge boost in commodity prices to resources profits.
In the US the news is not likely to be a good as it has been so far as earnings are concerned as major department store chains prepare to lodge their quarterly reports.Ralph Lauren s due to report on Tuesday night, our time.
Macy’s starts the department store earnings season on Thursday morning (US time). After posting disappointing results in the first quarter, investors will be keen to see if business has shown signs of stabilising. It has already announced thousands of job cuts and store closures.
Rival Kohl’s will also be reporting on Thursday, as will Dillard’s, while Nordstrom will announce after the close on the same day and struggling JC Penney is due to release its results on Friday morning.
Media stocks continue to report – the various companies associated the John Malone’s Liberty media group will report over the week, along with CBS, News Corp and Fox, Time Inc and Walt Disney.
