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CBA, COMMONWEALTH BANK OF AUSTRALIA
blacksheep
post Posted: Nov 12 2019, 02:55 PM
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In Reply To: blacksheep's post @ Nov 12 2019, 10:06 AM

CBA over-valued, says analyst
By David Scutt
QUOTE
The Commonwealth Bank of Australia (CBA) remains a sell despite a “strong” first quarter trading update, according to UBS analyst Jonathan Mott.

“Operationally, CBA is continuing to outperform peers,” Mr Mott said. “However, CBA is now trading on 17 times FY20E which makes it one of the most expensive developed market banks in global history, despite a falling earnings per share profile as net interest margins come under pressure from ultra-low rates and credit charges continue to slowly normalise.”

Despite the solid trading update, Mr Mott doesn’t expect that resilience to last longer-term.

“While we do not forecast quarterly, this was a good number, around $150m above the 'run-rate' embedded in our 1H20E estimates,” he said, referring to the bank’s cash NPAT of around $2.3 billion. “That said, we are always cautious to extrapolate quarterly updates which are inherently volatile, and Q1 is seasonally stronger at CBA."

Based on that view, UBS retains a sell rating on the stock with a 12-month price target of $70. CBA shares are up 0.6 per cent to $80.495 in late trade today.




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The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
blacksheep
post Posted: Nov 12 2019, 10:06 AM
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Better resultsthan some expected
.1Q20 Overview
QUOTE
• Unaudited statutory net profit of approximately $3.8bn2,3 in the quarter, including a $1.5bn gain on sale of CFSGAM4
.
Unaudited cash net profit from continuing operations of approximately $2.3bn2,5 up 5% ex notable items.
• Operating income up 3% on a day-weighted basis due to lower basis risk, one-off items and volume growth.
• Operating expenses up 2% (excluding notable items), reflecting higher staff costs and IT amortisation.
• Loan Impairment Expense of $299m, or 16 basis points (bpts) of average GLAA6
• Improved arrears across consumer portfolios.
• Troublesome and Impaired Assets slightly higher, with pockets of stress similar to those highlighted at the FY19 results.
• Strong funding position maintained, with deposit funding at 69% and the Net Stable Funding ratio at 112%.
• Strong CET1 ratio of 10.6% after 2019 final dividend payments (-90bpts) and organic generation of 35bpts ex one-offs7

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The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
nipper
post Posted: Nov 3 2019, 12:05 PM
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https://www.firstlinks.com.au/article/shoul...0572ff-83781601

CBA Perls XII
QUOTE
CBAPI’s issue margin of 3.00% provides a relatively attractive premium to our current fair value curve of major bank AT1 securities in the 7.5-year term to call range.

Following completion of the bookbuild, CBA has finalised the issue size at $1.25bn and a margin of 3.00%. Initially only seeking $750m and an indicative margin range of 3.00% to 3.20%, investor demand was clearly strong. The hunt for yield continues, triggered by low cash rates and growing expectations the RBA will cut further and even implement some form of quantitative easing in Australia.

Our near-term outlook for hybrid pricing remains constructive. The major banks are profitable, have strong AT1 capital positions and need to raise more Tier 2 Capital.....
Morningstar.

- it ain't a term deposit; risk is much higher



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

Said 'Thanks' for this post: early birds  
 
blacksheep
post Posted: Oct 4 2019, 11:36 AM
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CBA faces criminal charges over CommInsure scandal
QUOTE
Australia's largest bank is facing 87 criminal charges over unscrupulous practices in its life insurance arm — the first major bank to face criminal charges following the banking royal commission.

Commonwealth Bank's insurance arm CommInsure has been charged with 'hawking' for offering to sell insurance products through unsolicited phone calls.

The Australian Securities and Investments Commission (ASIC), alleges CommInsure did not comply with all of the hawking exceptions in section 992A(3) of the Corporations Act.

CommInsure has been sold by CBA, but the bank is liable because it owned the insurance arm at the time.

The maximum fine is about $1.8 million, ASIC said.

More to come.

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The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
nipper
post Posted: Aug 12 2019, 09:58 AM
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In Reply To: nipper's post @ Aug 7 2019, 09:42 AM

the bear case
QUOTE
..an important corollary of this has been reduced returns on equity, at just 12.5 per cent today from a very profitable 22 per cent in 2007. It means growth now costs more capital and eats into the capacity to pay dividends.

Not that growth is an issue today. Indeed, with little growth to fund, Commonwealth Bank was actually able to increase its payout ratio – to 80 per cent on an underlying level – and thereby hold the dividend flat.

Credit growth was consistently in the double-digits in the halcyon days. CBA’s results show this is now stabilising down at around 3 per cent, mostly due to economic conditions and regulatory restrictions. Continuing pressure on net interest margins and other income is making it increasingly difficult to achieve any revenue growth at all.





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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Aug 7 2019, 09:42 AM
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QUOTE
Commonwealth Bank of Australia has reported a bigger than expected decline in annual profit to $8.49 billion, as it flagged capital management initiatives were on the board’s agenda. The bank’s cash net profit fell 4.7 per cent to $8.49 billion, reflecting lower operating and net interest income, the bank said in an ASX statement.

The result was also marred by a 2.5 per cent increase in operating expenses, due to costs including higher customer remediation payments stemming from the Hayne royal commission and the addition of 600 compliance staff.

.....CBA chief executive Matt Comyn declared a final dividend of $2.31, leaving the full-year payment flat at $4.31. While not announcing any immediate new capital returns to shareholders, he said such measures were being actively reviewed by the board.

Mr Comyn also signalled that signs of life were returning the nation’s flailing housing market. “We are in a lower growth environment, but we are seeing improvement in the housing market, including improved clearance rates, stabilisation of prices in Sydney and Melbourne and slightly higher housing credit growth,” he said.

The ASX announcement said CBA’s board was considering potential capital management initiatives including an off-market share buyback. That would follow the $4 billion sale of the bank’s global asset management and the pending divestment of its life insurance arm.

CBA also told investors it was moving to close its Financial Wisdom planning business, but remained committed to an “orderly exit” of Colonial First State and mortgage broking interests Aussie Home Loans and a stake in Mortgage Choice.

The estimated pre-tax costs of closing Financial Wisdom are $26 million and CBA said it would stop providing licensee services by June 2020. The bank has already agreed to sell its other financial planning unit Count Financial.

The bank’s full-year statutory profit fell 8.1 per cent to $8.57 billion.
and, interestingly ....
QUOTE
CBA has also unveiled a big push into the global buy now pay later industry, which has potential to dramatically shake up the local market. The bank’s results announcement also revealed the bank has committed an investment of $US100 million in Swedish payments group Klarna Holding AB, as part of its $US460 million capital raising round.
The move foreshadows a move by CBA into the burgeoning buy now, pay later payments market. The move is likely to have implications for locally listed buy now pay later stocks including Afterpay Touch and Zip. “We will become Klarna’s exclusive partner in Australia and New Zealand and intend to further invest at the parent and local level to support this partnership,” CBA said.

Klarna has more than 60 million customers and 130,000 merchants and generated $US627 million in revenue in 2018....




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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

Said 'Thanks' for this post: early birds  
 

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nipper
post Posted: Jun 7 2019, 05:50 PM
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Closed @ $80.00

can't help thinking some buying for yield



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
mrbear
post Posted: May 29 2019, 07:59 PM
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In Reply To: nipper's post @ May 29 2019, 10:27 AM

With a bit of luck they may have seen the light after the federal election that you don't mess with old folk,look after them and they will reward you,cheers mrbear

 
nipper
post Posted: May 29 2019, 10:27 AM
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Australia’s biggest bank had tried for many years via a range of means including special offers to help customers transition away from passbooks. The effort, CEO Matt Comyn reported, was largely unsuccessful, with CBA still servicing more than 400,000 of the things.

The bank commissioned some research on the matter, which came back with the overwhelming advice “do not do it”.

“I hope I die before the Commonwealth Bank takes away my passbook,” was one passionate piece of feedback. That was enough to convince the boss.
QUOTE
“When you’ve got customers preferencing death over the cessation of a product or service it feels like a pretty difficult area to go after, so I’m very confident that we will continue to offer passbooks during my tenure within the organisation,” Comyn said today.




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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Feb 6 2019, 11:10 AM
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CBA has delivered a cash profit for the half year of $4.68 billion, up 1.7 per cent despite higher funding costs, driven by strong home lending growth from its branches, lower operating expenses and bad debts falling.

Dividend steady at $2.00



--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
 


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