One in two Aussies use CommBank for their banking needs and it is the biggest bank in Australia. CommBank comes roaring back from the depths of the pandemic. So much so that the bank’s earnings beat consensus estimates, resulting in the CBA share price setting another record high of $108.03 a share.
Why is the CBA Share Price at record high?
In today’s earnings release, the financial results for FY21 reflect the strength of the business and the disciplined execution of their strategy. At the top line, CommBank has seen volume growth across all three of their business segments – Business lending by $11b, Home lending by $31 billion, and Household Deposits by $31 billion. This top line metric has resulted in the return of profitability after a troubling FY20. Net profit after tax (NPAT) increased due to improved economic conditions and outlook resulting in a lower loan impairment expense and a strong operational performance. Commonwealth Bank reported that it generated $8.65 billion of cash net profit after tax, up 19.8% on FY20. Statutory net profit jumped 19.7% to $8.84 billion. Operating income rose 1.7% to $24.16 billion, whilst operating expenses increased 3.3% to $11.36 billion.
The full year dividend was supported by the Bank’s strong capital position. The final dividend is $2.00 per share, fully franked. That brings the total FY21 dividend per share to $3.50, an increase of 17% on FY20. The bank announced a $6 billion off-market share buy-back. The back-back brings long term benefits such as – a higher return on equity and EPS for CBA and a higher dividend per share for shareholders.
CBA share price has had a brilliant run already this year. CBA shares have gained over 30% this year in 2021 and over 50% in the past year. CBA shares also breached the $100 mark earlier this year and CBA continues to surge ahead. At market close today, on the back of this brilliant financial performance, CBA shares set another record high as the Commonwealth Bank share price closed at $108.17 a share.
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