Search ASX code:
Generic filters

CBA (ASX:CBA) Share Price Down 3%, Still Suffering From Royal Commission

The Commonwealth Bank of Australia (ASX: CBA) share price is down nearly 3% after releasing its March 2019 result.

Commonwealth Bank of Australia or CBA is Australia’s largest bank, with commanding market share of the mortgages (24%), credit cards (27%) and personal lending markets. It has 16.1 million customers, 14.1 million are in Australia. It is entrenched in the Australian payments ecosystem and financial marketplace.

What’s Happening To The CBA Share Price?

Commonwealth Bank shares are suffering today in reaction to the big bank’s third quarter announcement.

The key issue for investors was that the bank said that it had recognised an additional $714 million of customer remediation provisions in relation to the issues that arose from the Royal Commission.

CBA CEO Matt Comyn said: “The additional $714m in pre-tax customer remediation provisions taken in the quarter demonstrates this commitment, and builds on a range of other initiatives to achieve better customer outcomes, including removing and reducing fees for our customers.”

The problem is that this additional charge hit the cash net profit by 28% to $1.7 billion. Excluding ‘notable’ items, cash profit fell by 9%.

CBA said that its net interest income declined 3% due to the impact of two fewer days, but on a per-day basis net interest was flat with volume growth of mortgage lending, deposits and business lending offset by a reduction of institutional lending and a “slight reduction” of the net interest margin (NIM).

The bank also said that its lending portfolio quality remains sound but the loan impairment expense / bad loans increased to 0.17%, up from 0.15% in the first half of FY19.

CBA said consumer arrears were impacted by subdued wage growth and ‘cost of living’ challenges, most pronounced in outer metro areas of Perth, Melbourne and Sydney.

The bank also revealed that loans in negative equity represent 3% of total loans based on 31 March 2019 valuations, with around 75% in Western Australia and Queensland. One could guess quite a lot of this relates to regional mining towns.

With higher lending restrictions, higher capital requirements and rising bad debts, it seems bank shares are risky at the moment. The growth businesses in the FREE REPORT below could be better long term investment ideas compared to CBA right now.

At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.

Afterpay, Zip Co, Sezzle…

Is BNPL the opportunity of a lifetime or is the sector a ticking time bomb?

Rask's analyst has just finished a 7,500-word report, The Ultimate BNPL Sector Report, taking a deep dive into this booming ASX sector. It shines a spotlight on each of the major players. You can get the full analyst report for FREE by CLICKING HERE NOW or entering your email below.

Note: the report is 100% free.

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Afterpay, Zip Co, Sezzle…

Is BNPL the opportunity of a lifetime or is the sector a ticking time bomb?

Rask's analyst has just finished a 7,500-word report, The Ultimate BNPL Sector Report, taking a deep dive into this booming ASX sector. It shines a spotlight on each of the major players. You can get the full analyst report for FREE by CLICKING HERE NOW.

Note: the report is 100% free.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Keep reading:

Rask Media’s Ultimate BNPL Sector Report

Afterpay, Zip, Sezzle… is this the opportunity of a lifetime? Or is BNPL a ticking time bomb? This 7,500-word analyst report takes a deep dive into the BNPL sector and shines a spotlight on each of the major players in this booming market. 

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

As we emerge from COVID-19, some tech companies are growing faster than ever. Rask’s investment analysts have identified 3 growth stocks set to benefit. Big time.

Enter your email below to access this report for free, including the names, ticker codes and analysis.

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.