Key points from todays CBA trading update

Stock

Commonwealth Bank (CBA) $80.21 as at 12/11/2019

Event

CBA this morning provided a trading update that was strong, stronger than the other banks in terms of income growth which came in at +4% from the quarterly average of 2H19 to 1Q20. The cash profit was $2.26B for 1Q20 however the reported line was $3.8B given the sale of the Colonial First State Asset Global Management business

Interestingly, home loan growth was 3.5% in 1Q20, business loan growth was 2.8% and deposits increased by 10%, all on an annualised basis. Expenses were higher up by 2% however that was below income growth leading to positive ‘jaws’.

CET1 capital was 10.6% at 30/9/19 and going higher thanks to the above mentioned asset sale, somewhere around 11.2% moving to 11.7% by calendar year end – which is very strong.

All in all, another strong result from CBA showing income growth in a tough operating environment. CBA joins NAB as the top two banks in our view, followed by Westpac and lastly ANZ.

Commonwealth Bank (CBA) Chart

CBA Daily Chart

Market Matters Take/Outlook

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