CBA results are out and off the cuff, they look to have been a slight miss on expectations. Shares might open flat. Its result was supported by another improvement in the quality of its loan book, with loan impairment expenses down 1.5% to $1.08bn. However in total, CBA spent $1.1bn defending itself in lawsuits and hearings.
Here are the dot points from the results:
- Cash NPAT was down 4.8% to $9.233bn which was below an expected $9.554bn.
- Operating income up 2.6% to $25.907bn.
- Net interest margin up 5bps to 2.15%.
- Operating expenses up 9.2% to $11.599bn largely due to the AUSTRAC civil penalty of $700m.
- Loan impairment expense of $1.079bn down 1.5%
- Final dividend of $2.31, making a full year dividend of $4.31 per share, up 2 cents on FY17.
- Earnings per share of $5.29 down 6.2%.
- Return on equity of 14.1% down 160 basis points.
- Common Equity Tier 1 (APRA) capital ratio of 10.1%, flat on the prior year.
It’s been a tough year for the bank marred by compliance scandals, admissions by the Royal Banking Commission, loss of a CEO, management changes, board upheaval and a drop in the residential mortgage market. The bank was hit by $155m relating to costs stemming from the Royal Banking Commission and $700m in the Austrac money laundering case.
CBA’s new CEO Matt Comyn said the bank’s business fundamentals are still strong despite the challenges. “Operating momentum was driven by our core franchise which delivered good volume margin management in home and business lending, ongoing growth in transaction accounts and deposits, and continued uptake of our technology offering.”
CBA will pay a final dividend of $2.31 per share, taking the full year payout to $4.31 and two cents higher than last year.