Investors are highly anticipating the release on Wednesday of CBA’s full-year results, which are widely seen as a bellwether for the health of the broader economy.
The Commonwealth Bank is tipped to post full-year cash profits of more than $9.7 billion this week, a slight decline on last year’s record, as customers move their cash to higher-yield savings accounts, putting a squeeze on the bank’s profit margins.
The consensus is for the nation’s largest bank, and the ASX’s biggest stock, to report a $9.77 billion net cash profit, down five per cent on its record $10.2 billion profit last financial year. CBA’s net interest margin, a measure of profitability comparing banks’ funding costs with what they charge for loans, is expected to fall to two per cent.“What people are hopeful to see is a moderation in terms of margin pressure easing across the banks,” said Jarden analyst Jeff Cai, who expects cash profit to dip to $9.86 billion, one per cent above consensus.
Releasing the half-year results in February, CBA chief executive Matt Comyn warned late payments were likely to increase this year. Home loan arrears remained below the historical average but had risen from 0.8 per cent in December 2022 to 1.1 per cent a year later.UBS banking analyst John Storey said customers switching to high-interest term deposits and savings accounts was weighing on the bank’s profit margins.
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