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CBA

Commonwealth Bank Of Australia September Quarter 2019 Trading Update

Jordan Baird

Jordan Baird is the head ASR Wealth Advisers client services desk and has been with the organisation since 2017. He first started investing in his early years. While he believes that investors should leave no stone unturned he has a particular interest in trading based on broad macroeconomic trends along with specific analysis of innovative up-and-coming companies.

Commonwealth bank of Australia (ASX: CBA) is the largest bank and publicly listed company in Australia. CommBank has a market capitalisation of A$142 billion.

common bank

What are the main points of CommBank’ September Quarter results?

  • Unaudited statutory net profit of approximately A$3.8 billion.
  • Unaudited cash net profit from continuing operations of approximately A$2.3 billion, up 5% from the previous period.
  • Operating expenses up 2% (excluding notable items), reflecting higher staff costs and IT amortisation.
  • Home lending increased by 3.5% compared with the previous quarter.
  • Household deposits increased by 10.4% compared with the previous quarter.
  • Business lending increased by 2.8% compared with the previous quarter.

What is the outlook for CommBank?

CommBank’s management notes

The Bank remains well placed in a challenging operating environment, characterised by global macroeconomic uncertainty and historically low interest rates. Our strong capital position and balance sheet settings mean we are well placed to meet the needs of our customers, illustrated by good volume growth in our core markets of home lending, business lending and household deposits.

Overall, the Australia’s banking sector is on a double-edged sword. On one edge, availability of credit to consumers and businesses should increase due to low interest rates and an easing in lending regulations and capital requirements. However, on the other edge, the net interest margins for each bank could be squeezed even more.

What is the market response?

The market response to CommBank’s September quarterly activities report is slightly positive. CommBank’s share price is up around 0.5% and is currently trading at A$80.435. CommBank has a P/E ratio in the mid-teens and an annual dividend yield of around 5%.

 


 

Disclaimer:

This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)

(“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).

This article is provided for informational purpose only and does not purport to contain all matters relevant to any particular investment or financial instrument. Any market commentary in this communication is not intended to constitute “research” as defined by applicable regulations. Whilst information published on or accessed via this website is believed to be reliable, as far as permitted by law, we make no representations as to its ongoing availability, accuracy or completeness. Any quotes or prices used herein are current at the time of preparation. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceeding. The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor in relation to any information contained herein. Any projections are estimates only and may not be realised in the future.

ASR has no position in any of the stocks mentioned.

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