Australian Investment Blog

ASX:CBA 08/08/2018

Comyn gets the nod for his first result in charge of CBA

Stock

Commonwealth Bank (CBA) $74.54 as at 8/08/2018

Event

The CBA result was out this morning and it was messy however that was to be expected amid charges from the money-laundering settlement, margin pressure from short-term funding costs (CBA have not repriced loans higher) and the overall financial cost of ongoing regulatory issues. Actuals v expectations – about inline Underlying trends Loan growth: running at 2% for the FY18 financial year for the bank and its Australian business Margins; the Australian loan to deposit spread fell by 2 bps from 1H18 to 2H18 and so did the net interest margin, expect some re-pricing up of CBA mortgage rates Credit Quality; this was better with new and increased impaired assets falling from $1.25B in 1H18 to $882M in 2H18 plus we saw past due loans remain stable Trading Income; this was weak however that was well flagged Costs; overall costs were higher thanks to one offs however costs in the underlying business are being well managed (ex Capital; Tier 1 capital remained flat at 10.1% CBA Figures

Commonwealth Bank (CBA) Chart

Market Matters Take/Outlook

There was always going to be very little incentive for CBA to deliver a strong result today, however the result announced this morning is a reasonable one on an underlying basis and importantly, better than the market may have feared. The headlines will highlight that CBA have booked the first drop in profit since 2009 thanks to weak revenue growth and higher costs however assuming conditions remain as they are, that trend should flip back at the next set of results.

Subscribe to Market Matters Blog

Latest Reports

Weekend report 04/10/2025

Weekend Q&A: The ASX is on track for new all-time highs this week

The ASX200 ended last week up +2.3%, with the first three days of October already recouping all of September's decline. The healthcare sector made a welcome return to the winners' enclosure, ably supported by the influential miners and banks, while the energy sector was the only meaningful drag on the index. Only a flat week by the heavyweight iron ore miners reined in performance, although their sector peers worked hard to address their slumber, with 18 members of the materials sector closing out the week up more than +5%.

Afternoon report 03/10/2025

The Match Out: ASX finishes the week strong, APE jumps on CanadaOne acquisition

The ASX finished the week strongly, rising steadily through the session with strength in healthcare, tech and consumer names more than offsetting softer trade in energy and utilities.