CBA, COMMONWEALTH BANK OF AUSTRALIA

[blacksheep]

Commonwealth Bank could cut its highly-prized dividend after it spins off its wealth management and mortgage broking arms, under one scenario being discussed by analysts.

As most of the big banks retreat from the wealth sector, CBA is this year planning to de-merge the Colonial First State superannuation and financial advice business, as well as Aussie Home Loans and advice businesses Count Financial and Financial Wisdom.

The spun-out business, dubbed NewCo, would be split off from CBA late this year, and could be worth as much as $3.2 billion, Morgan Stanley analysts say.
In a note to clients, the analysts say the deal is likely to further boost CBA's capital (on top of CBA's plan to sell its funds management arm) above a "conservative" level, but also create an "earnings hole" which could lead to a re-think on CBA dividends.

They say the deal will leave CBA will "excess" capital, which could lead to share buyback or 85c a share special dividend by June this year.

But they add that CBA's board could review its dividend policy in the 2020 financial year. They put forward three scenarios: a flat CBA dividend; a flat combined CBA/NewCo dividend; or a flat CBA dividend payout ratio
.
The first two scenarios would result in a "New CBA" dividend payout ratio about 80 per cent - while the third would lead to a dividend cut.

https://www.shortman.com.au/stock?q=cba

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[blacksheep]

In Reply To: blacksheep's post @ Oct 8 2018, 03:11 PM

CBA hit with another $335m blow as fee-for-no service scandal widens and downsizing costs mount

The Commonwealth Bank's really bad and expensive year just got worse with another $335 million likely to be stripped from its 2019 bottom line by new costs dealing with regulatory compliance and plans to shrink its business.

Key points:
The bulk of the new costs relate to an additional $200m on top of an existing $270m provision for the the fee-for-no-service scandal
CBA also faces extra costs selling its scandal-plagued Comminsure Life business and demerging its wealth arm
The bank clawed back $135m in insurance from its disastrous $700m money-laundering fine
The new provisions are on top of the $1.1 billion of fines and "one-off" regulatory costs the CBA detailed in its 2018 full-year results.

But the market didn't seem to mind - what's another few hundred million - SP finished up 2.41% @ $70.08

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[blacksheep]

Schedule
Review of the Four Major Banks (Fourth Hearings)
PUBLIC HEARING
Thursday 11 October 2018
9.15 am Commonwealth Bank of Australia
1.15 pm Westpac

Friday 12 October 2018
9.15 am Australia and New Zealand Banking Group Limited

Friday 19 October 2018
9.15 am National Australia Bank

https://www.aph.gov.au/Parliamentary_Busine...Public_Hearings

[plastic]

While all of this was happening, who was the Chairman? And where is he now? Have a look at what is happening there. Seems he has the Midas touch in reverse.

[blacksheep]

Royal Commission interim report out by end of September
Analysts flag potential double-digit drop for CBA after Hayne inquiry

Morgan Stanley and Citi are flagging the potential of a double-digit fall in Commonwealth Bank shares if the royal commission into the financial services sector produces a harsher result than investors are expecting

https://www.afr.com/markets/equity-markets/...20180924-h15tg5

Citi is quoted saying shares could fall as much as 21% to a low of $57.25.

Overall, currently, short positions are not that high suggesting investors don't see such a fall happening - CBA's shares have fallen some 11% so far this year
Short positions @ 19th September, 2018 1.25%:
https://www.shortman.com.au/stock?q=cba

THE BIG FOUR BANKS (ANZ, CBA, NAB, WBC)
https://www.shortman.com.au/market

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[mrbear]

In Reply To: mullokintyre's post @ Aug 15 2018, 10:10 PM

We might whinge about our institutions but at the moment we are travelling through the balkan region and i can tell you aussie is worlds ahead. This place still has a big hangover from the communist days and if you want corruption and poor customer relations just come here. The people and and places are wonderful but the way they are run leaves a lot to be desired. Just like the attendant that walks out of his booth at a border crossing and doesnt come back for nearly 15 minutes and just leaves a heap of vehicles waiting in line , then when he does come back he lights up a smoke first. Ours are worlds ahead, cheers mrbear.

[triage]

Could be an interesting morning for CBA and ASIC at the royal commission today.

Yesterday, the counsel assisting, Rowena Orr, spent a surprising amount of time talking to a CBA boss about a single heart attack victim who was denied a payout by CBA because of the definition of heart attack used at the time by CBA. So far I think it has been established that after some unaccepatable provarication to the client and to the Financial Ombudsman Service CBA eventually paid the customer what he would have been paid had they accepted that he'd had a heart attack. In part, this was brought to a head by a Four Corners story in early 2017 (?) that alleged that CBA had broken the law in how it handled claims for illnesses such as heart attacks. All good (and great for the customer affected) but hardly suggestive of some massive systemic problem like many of the previous case studies looked at by the royal commission.

But then yesterday afternoon Ms Orr moved onto the fact that ASIC had carried out an investigation of the claims made in the Four Corners story about CBA insurance. In late 2017 ASIC found that CBA had not broken any laws and within the bank this was seen as a massive victory. But Ms Orr then showed that since at least 2011 CBA was aware that its definition of heart attack fell well short of what was universely accepted by relevent international heart specialist organisations, was being advised by its own chief medical officer that the definition it was using was wrong and discriminatory but persisted with using that definition for commercial reasons. Moreover she seemed to suggest that ASIC, in preparing its final report on the Four Corners allegations, worked with CBA so that CBA could present itself in the best possible light. Again, I think it is worth noting that it was made quite clear that the way ASIC handled the issue was considered by CBA executives as a massive win for CBA.

Ms Orr may not attempt to join the dots here but my feeling is that she is not far from suggesting that for a number of years CBA wilfully ripped off its insurance policy holders and that ASIC gave CBA a free pass on that behavior. I suspect this will be another example of the regulator working too closely with the regulated.

[blacksheep]

In Reply To: mullokintyre's post @ Aug 15 2018, 10:10 PM

Now we're talking Mick

[mullokintyre]

In Reply To: blacksheep's post @ Aug 15 2018, 09:07 PM

APRA, ASIC and all the other alphabets are just as complicit.
Self serving, overpaid parasites that are part of the problem.
Get rid of them, but as they do, jail every CEO of an institution that had defrauded the customers.
Nothing concentrates the mind like a term in the slammer.
CEO's are paid ridiculously large amounts of mullah, as they are ultimately responsible for the operations of the iinstitution.
Then see how compliant the bastards will be.
Fines just come out of the shareholder and customers pocket.
Hold a royal commission every 5 years, would be infinitely cheaper than the alphabets, but 100 times as effective.
Mick

[blacksheep]

In Reply To: mrbear's post @ Aug 15 2018, 07:52 PM

I couldn't care less who they charge as long as they remain profitable and pay out divs.

So allowing crooks/drug dealers/possible terrorists to send millions off shore (money laundering), each transaction added to the banks coffers/profitability, charging dead people and other excessive fees, which also also added to their coffers, is all OK?

Makes you wonder why there are laws in place that prohibit, not to mention watchdogs employed to make sure they adhere to the laws. Maybe we should get rid of APRA, ASIC, and cancel the Royal Commission, and the Banks will once more "self regulate"/business as usual and then there'll be more divs to go round Think of the savings to taxpayers as well - your welfare friends might even get an increase Win win all round.