The major bank reported a $1.4 billion increase in cash profit to $8.7 billion over the last 12 months, a 19.8 per cent increase.
Commonwealth Bank’s chief executive, Matt Comyn, said Wednesday’s results reflect an “ongoing strong operational performance of the core businesses of retail, business and institutional banking”.
“We are focused on continuing to make progress on our more ambitious strategy – building tomorrow’s bank today for our customers,” he said.
“Reimagining banking through new products and partnerships that will support our customers and help build Australia’s future economy, while focused on disciplined execution and investing in digital and technology capability.”
Meanwhile, CBA confirmed a $6-billion off-market buyback of shares on the back of the divestment of some of its businesses.
Dr Peter Gardner - senior portfolio manager at Plato Investment Management - said investors should be encouraged by the off-market buyback announcement.
"The CBA result highlights strong management and leadership through what has been a very unpredictable 12 months and underscores our view that of the big 4, CBA is best positioned to deliver sustainable income and capital growth for investors in the coming year and beyond," Dr Gardner said.
“We’re continuing to see evidence that many of the expected dire outcomes of COVID-19 on the banking sector simply have not eventuated."
The CBA board determined a final dividend of $2 a share – based on a payout ratio of 71 per cent of cash profit – with the total coming to $3.50 a share fully franked.
CBA’s common equity tier 1 (level 2) capital ratio is reported to have come in at 13.1 per cent – 260 basis points above APRA’s 10.5 per cent “unquestionably strong” measure.
Mr Comyn continued: “We are prepared for a range of different economic scenarios and are well placed to support our customers.
“We’re committed to new and ongoing support measures for those most impacted by COVID-19 and other events. We will continue to work closely with our retail and business customers to understand their needs.
“Looking ahead, we anticipate ongoing economic impacts and earnings pressure from lower interest rates. We will continue to invest in the business to reinforce our product offering to our retail and business customers and extend our digital leadership.
“Through disciplined execution and our people’s care and commitment, we will continue to deliver for our customers, community and our shareholders as we build tomorrow’s bank today.”
The news comes after CBA's current Chief Marketing Officer, Monique Macleod, was appointed as the bank'snew Group Executive Marketing and Corporate Affairs on Tuesday.
Ms Macleod is expected to commence the new position in September.
“As part of marketing and corporate affairs senior leadership team, Monique has played a vital role in the revitalisation of the Commonwealth Bank brand and reputation over the past few years," Mr Comyn said.
“Monique has brought teams together to directly influence how we engage retail and business customers, communicate with stakeholders and the broader community, and manage brand and reputation issues. Under her leadership, we have increased brand consideration, refreshed our brand for the first time in almost 30 years, and positioned the organisation as the largest supporter of women’s sport ever."
Neil Griffiths
Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.
Neil is also the host of the ifa show podcast.
