The Commonwealth Bank of Australia (ASX: CBA) share price is in focus today after the ASX bank share reported its FY26 half-year result, showing profit and dividend growth.
Commonwealth Bank is the largest bank in Australia and currently the largest business on the ASX.
Commonwealth Bank FY26 half-year result
Here are some of the highlights from the HY26 result for the six months to 31 December 2025, showing year-on-year growth:
- Operating income up 6.6% to $15 billion
- Underlying operating expenses up 5.5% to $6.7 billion
- Pre-provision profit up 5% to $8.1 billion
- Cash net profit up 6% to $5.44 billion
- Statutory net profit up 5% to $5.41 billion
- Interim dividend per share up 4% to $2.35
CBA’s income and growth
Commonwealth Bank reported that its operating income climbed due to higher lending through disciplined franchise growth.
The ASX bank share said that its net interest margin (NIM) – lending profitability – was flat at 2.04% on an underlying basis, year on year. But, it was slightly lower (1 basis point (0.01%)) than the second half of FY25 due to competition in home lending and lower treasury and markets income.
However, the NIM decline was somewhat offset by some other factors, including strong growth in at-call deposits.
Net profit was able to grow solidly thanks to a 7% rise in the average lending and 8.4% increase for deposits. Over the 12 months to December, CBA’s home lending rose 6.6% (the same as the overall loan system), while CBA’s business lending increased 12.3% (compared to 9.8% for the loan system).
Commonwealth Bank’s expenses and loan performance
Underlying expenses grew strongly year on year because of inflation, increased investment in technology and additional lenders and operations resources. But, this was partly offset by benefits of productivity initiatives.
Commonwealth Bank also said its investment spend was $1.2 billion, up 10% year on year, reflecting the ongoing “modernisation” of its technology infrastructure and its customer-focused product offerings, as well as enhancing its generative AI capabilities.
The loan important expense was $319 million, which was flat year on year, but down 21% on the second half of FY25. CBA said this reflected improved credit quality. Home loan arrears decreased by 7 basis points (0.07%) in the half, reflecting lower interest rates and seasonal tax refunds.
The ASX bank share said 87% of home loan customers are now in advance of their scheduled repayments. Commonwealth Bank said its provision coverage remains strong at 1.55% of credit risk weighted assets (loans). It has a $2.8 billion buffer compared to expected losses under its central economic scenario.
CBA dividend
The 4% increase in the half-year dividend to $2.35 represented a $0.10 increase year on year.
Commonwealth Bank said this payout represents a half-year payout ratio of around 74% on a normalised basis.
It said it will continue to target a full-year payout ratio of between 70% to 80% of cash net profit. CBA also said it has a long-term focus on sustainable payout per share growth, delivering “consistent” dividend growth.
Outlook for the Commonwealth Bank of Australia share price
The bank said that economic growth strengthened during the half, driven by increases in consumer demand and rising investment in AI & energy infrastructure.
However, supply side constraints mean the economy is strongly to meet this increased demand, according to CBA, so inflation is expected to be above the RBA’s target for some time, putting upward pressure on interest rates.
The ASX bank share said it’s optimistic about the prospects for the economy.
The Commonwealth Bank share price has been a strong performer over time and this result showed further progress for its financials and dividend.
But, it’s not cheap for how quickly it’s actually growing and will need to continue growing to justify its high valuation. But, I’d rather own a growing bank like CBA than a bank that isn’t growing earnings. However, Macquarie Group Ltd (ASX: MQG) is growing rapidly, meaning further competitive pressures for .
For now, there are other ASX dividend shares I’d rather buy than the ASX bank share at the current Commonwealth Bank share price.
