CBA share price on watch after half-year profit beat

Australia's largest bank has delivered a strong result this morning. Here's what it reported.

| More on:
A woman wearing yellow smiles and drinks coffee while on laptop.

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

The Commonwealth Bank of Australia (ASX: CBA) share price will be worth watching closely on Wednesday.

That's because Australia's largest bank has just released its half year results.

Let's see how the big four bank performed during the six months.

CBA share price on watch on results day

  • Operating income up 3% to $14.1 billion
  • Operating expenses up 6% to $6.37 billion
  • Pre-provision profit up 1% to $7.73 billion
  • Cash net profit after tax up 2% to $5.13 billion
  • Cash earnings per share up 2.3% to 307 cents
  • Fully franked interim dividend up 5% to $2.25 per share

What happened during the half?

For the six months ended 31 December, CBA reported a 3% increase in operating income to $14.1 billion.

This reflects volume growth in its core businesses and a small increase in the bank's net interest margin (NIM) to 2.08% after the effects of competitive pressure on deposits and lending pricing were offset by higher earnings on capital hedges and the replicating portfolio.

Operating expenses increased 6% over the prior corresponding period. This was mainly driven by higher staff expenses due to inflation and two additional working days, and additional investment to accelerate the refresh of its technology infrastructure and to further enhance its generative AI capabilities and data infrastructure.

Nevertheless, the bank still recorded a 1% increase in pre-provision profit to $7.73 billion, a 2% lift in cash net profit after tax to $5.13 billion, and a 2.3% rise in cash earnings per share to 307 cents. The latter is ahead of the consensus estimate of 291 cents per share, which could bode well for the CBA share price on Wednesday.

Finally, the bank's board declared a fully franked interim dividend of $2.25 per share, which represents a 5% increase on the prior corresponding period.

Management notes that this represents a half year payout ratio of ~75% on a normalised basis, which reflects its aim to pay strong and sustainable fully franked dividends. It continues to target a full year payout ratio of 70% to 80% of cash net profit after tax.

Management commentary

CBA's CEO, Matt Comyn, was pleased with the results. He said:

Through supporting our customers and investing in our franchise, we have been able to deliver solid results for our shareholders, despite the weaker economic backdrop. Our consistent financial performance demonstrates our disciplined operational and strategic execution, and the bank's deep customer relationships that help us understand needs and risks and deliver superior digital experiences.

Comyn was cautiously optimistic about the remainder of FY 2025. He adds:

The Australian economy has slowed considerably, with cost of living pressures continuing to weigh on consumer demand and younger customers in particular making real sacrifices. Private sector growth is weak, immigration is starting to slow and geopolitical uncertainties remain.

However underlying inflation is now moderating towards the target range and we expect Australia will follow offshore economies with an easing cycle starting in 2025. This should provide some relief to many households and improve business confidence. The strong labour market and level of ongoing public sector infrastructure spend also provide cause for optimism on the domestic economic outlook.

The CBA share price is up 40% over the past 12 months.

Should you invest $1,000 in Core Lithium Ltd right now?

Before you buy Core Lithium Ltd shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Core Lithium Ltd wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 6 March 2025

Motley Fool contributor James Mickleboro 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 Earnings Results

A lion dressed in a business suit roars as two sheep sit awkwardly at the boardroom table.
Materials Shares

Liontown share price roars higher on half year results

This lithium miner has handed in its report card on Friday.

Read more »

Mini house on a laptop.
Earnings Results

Guess which ASX 200 stock just rocketed 11% on surging earnings

Investors just sent this ASX 200 stock rocketing on Friday. But why?

Read more »

Woman looking at prices for televisions in electronics store representing increasing sales yet adecline in the JB Hi-Fi share price over FY22
Earnings Results

Why is the Harvey Norman share price soaring in Friday's sinking market?

ASX investors are piling into Harvey Norman shares today. But why?

Read more »

A smartly-dressed businesswoman walks outside while making a trade on her mobile phone.
Earnings Results

TPG share price surges 6% after achieving FY24 earnings guidance

Investors were happy to see the telco achieve its guidance in FY 2024.

Read more »

Two men in hard hats and high visibility jackets look together at a laptop screen at a mine site.
Earnings Results

Sayona Mining share price wobbles amid growing half-year losses

Sayona Mining shares are in the spotlight following the lithium miner’s half-year results.

Read more »

A young man punches the air in delight as he reacts to great news on his mobile phone.
Earnings Results

Life360 share price jumps 11% on impressive FY24 results

This high-flying tech stock has delivered another strong result today.

Read more »

CA woman sits on her bed wailing and crying with a wine bottle in one hand and a glass in the other.
Earnings Results

$8 billion ASX 200 stock sinks 6% on big dividend cut

Falling profits has forced a dividend cut from this blue chip.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Earnings Results

Why is this ASX 200 energy share rising 9%?

This international oil and gas producer released its full-year FY24 report today.

Read more »