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