CBA +1.31%: Out with a quarterly trading update today that seemed strong on the data provided, noting that not a huge amount of detail is given quarterly. Margins looked to be sector leading and while they don’t give a specific Net Interest Margin (NIM) result for the 3 months, UBS noted their expectations that NIM expanded by >25bps QoQ, stronger than any of the other majors and reflected the benefit of their retail deposit base. Bad debts were as expected while costs were slightly higher.
We think a sector-leading result from the sector leader, with MM remaining long CBA in both the Flagship Growth & Active Income Portfolios. In terms of valuation, it’s always expensive, but it’s not excessively so versus history, trading on 17.5x forward P/E versus 16.2x historical average with the range being between 12-21x.
MM remains long CBA
Add To Hit List
