CBA (ASX:CBA) Grows Profit To $2.3 Billion In FY20 Q1

Companies and indices mentioned:

CBA (ASX: CBA) has reported its result for the first quarter of FY20 which showed growth.

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.

CBA’s First Quarter Of FY20

The big four ASX bank reported that in the first quarter of FY20 its continuing operations cash net profit excluding notable items of $2.3 billion rose by 5% compared to the average quarter profit of the second half of FY19.

The result was driven by both operating income increasing by 4% and operating expenses rose by 2% excluding notable items.

Including notable items the reported expenses fell by 9% due to the customer remediation in the second half of FY19. Including notable items, cash net profit rose by 18% because this quarter didn’t include any customer remediation.

Statutory net profit of $3.8 billion for the quarter included a $1.5 billion gain on the sale of Colonial First State Global Asset Management (CFSGAM) which completed 2 August 2019.

CBA reported a loan impairment expense of $299 million in the quarter, which equated to 0.16% of gross loans and acceptances. However, troublesome and impaired assets of $8.1 billion was 4% higher than at June 2019 and 22.8% higher than September 2018.

The bank said that there are pockets of stress similar to those highlighted in the FY19 result.

However, in terms of consumer arrears there was improvement across the spectrum compared to June 2019. Personal loans 90+ day arrears improved 0.13% to 1.43%, credit cards improved 0.14% to 0.88% and home loans improved 0.04% to 0.64%.

During the September 2019 quarter, home lending volume grew at an annualised 3.5%, household deposits grew by 10.4% and business lending grew by 2.8%.

The major bank reported a CET1 ratio of 10.6% after the final FY19 dividend which reduced the ratio by 0.90% and organic generation of 0.35% excluding one offs.

CBA CEO Matt Comyn said: “The Bank remains well placed in a challenging operating environment, characterised by global macro economic uncertainty and historically low interest rates.”

Here are 3 stocks I own in April 2020...

Amidst the COVID-19 confusion, there are some companies still growing FAST (think: online meetings through Zoom, streaming companies like Netflix and eHealth services provided by Teledoc).

While the world grapples with COVID-19, some companies are still growing rapidly. The entire cloud computing market is valued around $US210 billion but if you ask me, it seems clear as day that this market is only going to get bigger in 2020 and beyond.

That's why our top investment analyst has just identified 3 growth stocks in a net cash position, with strong competitive forces... and obvious tailwinds at their back. He owns all three of them right now!

Claim a FREE investing report on our analyst's "3 best share ideas for the cloud revolution" when you create a free Rask Australia account.

Our report is 100% free and unlocks hundreds of hours of bonus content.

Simply click here to access the report.

Disclaimer and warning: This information is published by The Rask Group Pty Ltd and contains general financial advice and information. That means, the information/advice does not take into account your objectives, financial situation or needs. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. 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. Please read our Terms of Service and Financial Services Guide before using this website.

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

Jaz Harrison

Jaz Harrison

Jaz is a keen investor who loves to thoroughly poke holes in an investment idea before it has a chance of making it into her portfolio. Jaz invests for the long-term and doesn't sweat the small stuff. She strongly believes that empowering people with knowledge is the best way for them to take charge of their finances, which is exactly the approach she takes with her own money and investments.