Aussie CBA Improves Dividend, Shows Slashed Profits As Lending Resumes

Adds details on loan deferrals, CEO statement and other actions

February 10 (Reuters)Commonwealth of Australia Bank CBA.AX Wednesday declared a higher dividend than six months ago and topped estimates for first-half cash earnings, driven by growth in personal and business loans.

Australia’s largest lender declared an interim dividend of AU $ 1.50 per share, up from the final dividend of AU $ 0.98 announced in August, although lower than the payout of AU $ 2.00 per share last year.

Australian banks, like their peers around the world, were hit hard in 2020 as near-zero interest rates and provisions for bad debt due to the pandemic squeezed their margins.

However, a recent pick-up in customer loan repayments following stronger job growth and increased demand for new homes due to record mortgage rates have helped improve the outlook for the sector. banking.

The Sydney-based CBA said around 25,000 home loans remained outstanding as of Jan. 31, compared with 145,000 loans at the end of June last year.

“While the outlook is positive, there are a number of health and economic risks that could slow the pace of the recovery,” Managing Director Matt Comyn said in a statement.

“The low interest rate environment will continue to put pressure on our income.

Net profit after tax from continuing operations fell to A $ 3.89 billion ($ 3.01 billion) for the six-month period ended Dec. 31, from A $ 4.36 billion a year earlier. It topped the average estimate of A $ 3.76 billion by six analysts polled by Reuters.

The bank’s Tier 1 (CET1) capital ratio, a closely watched measure of the bank’s available liquidity, rose to 12.6% as of December 31 from 11.8% as of September 30, 2020.

($ 1 = Australian dollars 1.2927)

(Reporting by Shriya Ramakrishnan in Bangalore; Editing by Ramakrishnan M.)

(([email protected]; +91 8061822842;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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