The Commonwealth Bank of Australia (ASX: CBA) share price could jump higher today following the release of its half year results.
Here are the key takeaways from Commonwealth Bank of Australia's half year report:
- Profit rose 2% to $4,907 million
- An interim fully franked dividend of $1.99 per share was declared, up one cent
- Earnings per share were flat
- Its net interest margin (NIM) was squeezed to 2.11% from 2.15%
Commenting on the result, Commbank CEO Ian Narev said the group is executing on its technology strategy and growing the company's balance sheet consistently.
"We have maintained our commitment to our long term strategy," Mr Narev said. "We have invested carefully but consistently over many years, leading to ongoing revenue and balance sheet growth, and continuous innovation for our customers."
Pleasingly, the company's impairment expense fell to just 0.17% of all loans. However, arrears on home loans appear to have ticked upwards slightly year over year, driven higher by Western Australia.
Looking ahead, Mr Narev said globalised risks remain high but Australia is on a positive footing.
"The combination of geopolitical volatility and weak economic recovery in parts of the world means the risk of market volatility, and indeed economic shock, remains heightened."
He added, "we will continue to manage our balance sheet, and our expenditure, conservatively. But we will also continue to invest confidently so we can play our part in the bright future that we see for Australia."
Buy, hold or sell CBA shares
Commbank's results appear largely in-line with analyst forecasts, although investors will be pleased by the very modest increase to the interim dividend, which will be paid in April.
Indeed, given the recent patch and outlook for the Australian economy, today's result appears upbeat. However, for my money, I think Commbank may have a challenging couple of years ahead and at today's prices CBA shares are not a buy.
