Own CBA shares? Here's what to watch in next week's full-year results update

Shareholders have been told about early profit pain in the bank's result.

| More on:
A young man sits at his desk with a laptop and documents with a gas heater visible behind him as though he is considering the information in front of him. about the BHP share price

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Commonwealth Bank is going to report its result next week on 9 August
  • CBA shares are down after telling shareholders about $212 million of costs that will be included
  • Numerous analysts are negative on the ASX bank share right now

Commonwealth Bank of Australia (ASX: CBA) shares are currently in the red by 0.3% following the ASX bank share's announcement regarding expenses that are going to be included in the upcoming FY23 result.

CBA is due to release its full-year result on 9 August, which will tell investors about a number of elements of the company's performance over the 12 months to 30 June 2023.

The reported net profit after tax (NPAT) figure is going to take a $212 million hit.

Notable items

Sometimes a business will report notable, significant or one-off items in the result.

Why are some expenses separated like that? It's so that the business can more easily tell investors about the underlying performance of the business, which management would argue more accurately reflects how the company is going.

Of course, these are actual costs and shareholders have lost out on those dollars.

CBA revealed that in the half-year to 30 June 2023, it's recognising $212 million of pre-tax provision across two items.

First, costs associated with Bankwest, including the transition of business banking to CBA and changes in the group's operating model.

The second part of the $212 million relates to costs regarding a one-off levy for the compensation scheme of last resort after approval by the Australian Parliament in June 2023.

The ASX bank share explained that in order to provide a "transparent view" of its performance, CBA will exclude these items from the underlying operating expenses. To enable investors to judge the result, CBA will present operating expenses both on an underlying and headline basis.

What else could CBA shares report?

I'd guess that not many people know the final figures within CBA's report at this stage – perhaps a few leadership figures and accountants have seen the numbers.

Analysts have had a go at estimating what the business might report.

There are a number of things for investors to think about in this result – the net interest margin (NIM), loan arrears, credit provisions and the outlook commentary. Interest rates have soared over the past year or so, which could impact all of these areas of the report.

Commsec estimates currently suggest that CBA could report earnings per share (EPS) of $5.97. That would put the bank valuation at more than 17 times FY23's estimated earnings.

Are analysts feeling positive about the company?

There is a lot of negativity about the CBA share price at the moment.

Commsec collates analyst opinions about companies. At the moment there are no analysts that think the CBA share price is a buy. Three think it's a hold and twelve believe it's a sell.

Time will tell whether negativity is the right belief for CBA's valuation and result.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Bank Shares

Shocked office worker staring at computer screen with colleagues working in the background.
Bank Shares

The ASX bank share beating CBA in 2025

Many investors might not realise this smaller bank stock is leading the pack this year. 

Read more »

man thinking about whether to invest in bitcoin
Bank Shares

Here's what needs to happen for the CBA share price to try and reach $200

What could drive the CBA share price higher?

Read more »

A young woman sits at her desk in deep contemplation with her hand to her chin while seriously considering information she is reading on her laptop.
Bank Shares

Why now could be an opportune time to sell CBA shares

A leading expert offers his verdict on the outlook for CBA shares.

Read more »

A man holding a cup of coffee puts his thumb up and smiles while at laptop.
Bank Shares

The Westpac share price is a buy – UBS

The broker is optimistic on Westpac shares.

Read more »

Bank building with the word bank on it.
Bank Shares

The biggest buyers and sellers of ASX 200 bank stocks revealed

Macquarie breaks down who’s been buying and who’s been selling the ASX 200 bank stocks.

Read more »

A young woman sits with her hand to her chin staring off to the side thinking about her investments.
Resources Shares

Should I switch my ASX 200 banking stocks for ASX 200 miners before earnings season?

The ASX 200 Index is dominated by Australia's bank and materials/mining sectors, which together account for around half of the…

Read more »

A man sits in contemplation on his sofa looking at his phone as though he has just heard some serious or interesting news.
Bank Shares

Here's when Westpac says the RBA will now cut interest rates

The RBA surprised everyone by keeping rates on hold last week. So, when will the next cut happen?

Read more »

Hand holding Australian dollar (AUD) bills, symbolising ex dividend day. Passive income.
Bank Shares

This is the ASX bank stock with the largest dividend yield right now

Looking to ASX bank stocks for dividend income right now?

Read more »