CBA Half Year Results

Australia’s star performer keeps starring.

CBA cemented its role as the retiree’s best friend, releasing another stellar half-year result and posting a fully franked interim dividend of $2.35, up 10 cents from last year, lifting the bank’s share price by almost ten per cent.

A stronger domestic economy spurred demand for banking services with the Commonwealth reporting a massive cash profit for the half year to December of $5.4 billion, some $200 billion higher than expected.

While the result spurred the share price of all the big banks, the CBA remains the standout performer with planned investment in IT set to reach $1 billion, largely due to stronger partnerships with OpenAI, Anthropic and Amazon Web Services.

Surprisingly, the bank noted economic growth is recovering faster and more strongly than expected, with domestic activity remaining resilient to global trade disruptions, tariff uncertainty and fluctuating global AI investment flows.

Despite the standard of living crisis, the bank’s credit quality improved, with bad debts declining from 0.97% to 0.89% over the six months, reinforcing the bank’s strong and stable financial position.

Margins remain under pressure due to rising competition and inflation-driven cost challenges and operating expenses jumped 5.5%, largely due to wage growth and ongoing technology investment. Net interest margins eased from 2.08 to 2.04 per cent.

Management claimed the tighter margins were due to heightened lending competition, a lower cash rate environment, and increased holdings of liquid assets and repurchase agreements.

CBA’s balance sheet continues to demonstrate strength and conservatism. Deposit funding sits at 79%, liquid assets total $199 billion, and the CET1 capital ratio remains robust at 12.3%.

It’s results like these that reinforce CBA’s position as a core holding for income-focused portfolios.