Morning Report Monday 10 August 2015
“Don’t Panic” CBA is following our Path
The market is expecting CBA to join both ANZ and NAB in raising new funds this week to make APRA happy – not the shareholders who have recently seen their capital eroded by well over 15%. When CBA report on Wednesday (Bendigo Bank (BEN) today), they are expected to deliver a profit of over $9bn and a significant capital raising between $4 and $7bn to lift their capital position. So far National Australia Bank (NAB) raised $5.5bn in May, Westpac (WBC) raised $1.25b via a tier 1 Hybrid and ANZ $3bn last week. Importantly for investors, the market is predicting CBA will pay an extremely healthy $2.22 fully franked dividend after February’s $1.98 fully franked payment. The yields from our banks remain very attractive, looking forward to 2016, especially on a grossed up basis for those who can utilise franking credits:
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