CBA - Commonwealth Bank of Australia

[Messenger]

Thanks for all the charts here.

CBA indeed looks like to have a correction.

First step to $34? Then to ???

 

[StevieC]

Any ideas on when the CBA will go Ex div for the second dividend installment this year?
Steve

 

[cuttlefish]

Any ideas on when the CBA will go Ex div for the second dividend installment this year?
Steve

mid-august I think (i think ex div 17th Aug but check this).

what more can i offer in response to this question that would make it a hundred characters.


I am of the tentative belief that the date at which the Commonwealth Bank of Australia company, trading as ASX code CBA on the Australian Stock Exchange Limited is going to have its next ex dividend date in the vicinity of the middle of the month of August, in the year 2009, and am of the understanding that the precise date is the 17th of August but I recommend checking this information before relying upon it.

yay 100 characters without any deliberate padding.

 

[StevieC]

thanks Cuttlefish. much appreciated. Wow I see what you mean re 100 characters. I have not struck that before on a forum.

 

[Sean K]

thanks Cuttlefish. much appreciated. Wow I see what you mean re 100 characters. I have not struck that before on a forum.

Stevie, we also have an infraction system and if you pad out posts to make 100 characters you score a 2 pointer!! Keep it in mind.

 

[shag]

Stevie, we also have an infraction system and if you pad out posts to make 100 characters you score a 2 pointer!! Keep it in mind.

some of us dont have a hundred characters in our vocab sometimes. like its dam annoying to get the dictionary and thesaurus out all the time. geez its a tough world.
maybe we could just do a bigdog job and paste in daily trades etc to pump out the thing....

 

[lianeisme]

CBA has played by the rules so far, an ABC correction may play out before it continues upwards again.

Just my amateur

(click to enlarge)

Hello I don't really understand charts I have an idea. Is anyone able to explain these in a very simple context that I could understand. Example what part of the chart shows buy signals, where doe it show the breakout etc.

 

[lianeisme]

Does anyone have any idea in regards to the banking sector in Australian at present.

I am holding shares in cba,wbc and suncorp and have been watching every movment in London and America. Banks are soring however in Australia everyone seems to be sitting on the fence stocks not doing much at all last night with exception to sun

Bac fell by .18% but they were slapped with a heavy fine and still more to come for them so that’s understandable

RBS + 9.75%

LLOY+11.50%

AXP + 3.16%

Citigroup + 6.42%

This has been the momentum for the past week in both USA and London, However we don't seem to be following in this way with the banking sector in Australia

Has anyone got any idea why the Australian market is so jittery with the banking sector it appears we are sitting in one of the best positions in the world within that sector.

Suncorp has been slapped with a speeding fine but its about time it started speeding nice to see granny out of the slow lane.

 

[Sean K]

Yep, banks have had a poor run since the March bottom. Only up 50% or so.

I managed to buy this as a knife catch in late Jan and sold for a nice 5% profit. Nice one kennas. My best investment decision this year.

I think it depends on where you think the overall market is going. Was that a bottom? Do you think this is like the GD and we're heading down to an 80% overall fall. Troubling times.

 

[oldblue]

I think that the major reason is that the Aust banks havn't previously taken the hammering that a lot of overseas banks have. These are now starting to see a bit of a recovery but mostly coming off a very low base.

The market also expects Aust banks to have to keep provisioning for bad debts at a relatively high level for some time yet and possibly also to again raise new capital before too long with the dilutionary effect that this has. Nevertheless, the "four pillars" are ranked in the eight highest rated banks worldwide and this should continue to be the case, IMO.

SUN is a different case with speculation of breakup and/or takeover driving the SP.

 

[lianeisme]

I bought SUN at 4.48 still holding this stock has fare exceeded my epections in this short time frame. I was planning on holding for 2 years then selling half of so the rest become free stock this may happen a lot sooner than I thought.
It is a very interesting world we are living in.

 

[Faithinchartz]

Sigh... alright man. Be sure to come back in 6 months time and let me know how your bank stock portfolio goes.

Hi Juw177,
I followed your debate with econinvestor with interest. Looks like he or she nailed in on the CBA...well up over $37 (44 in fact) and in less than six months. I'm getting turned of charting after this stuff, but maybe you can restore my faith...

 

[Mofra]

Interesting to read about the $700m+ they are raising via the PERLS V issue announced today.

Raising capital, cutting dividends - is CBA on the acquisition trail again, despite barely bedding down BankWest?

 

[ajjack]

Yeah Mofra you could be right.
BankWest has turned out to be a success for them,
so could they be looking at SUN or BEN?

Perhaps not, .. that's too obvious.

 

[asel]

This will make it the first hybrid raising of the year. I would have much preferred an ordinary equity raising though!

 

[michael_selway]

Interesting to read about the $700m+ they are raising via the PERLS V issue announced today.

Raising capital, cutting dividends - is CBA on the acquisition trail again, despite barely bedding down BankWest?

CBA has doen well yep

Earnings and Dividends Forecast (cents per share)
2009 2010 2011 2012
EPS 292.7 301.3 365.9 442.7
DPS 228.0 228.0 268.0 317.3

6/00 6/01 6/02 6/03 6/04 6/05 6/06 6/07 6/08 6/09
EPS 189.1 189.6 209.3 157.3 196.8 303.0 296.7 339.7 344.4 292.7
DPS 130.0 136.0 150.0 154.0 183.0 197.0 224.0 256.0 266.0 228.0

Eric Johnston
August 12, 2009 - 2:35PM
While the headlines of Commonwealth Bank of Australia’s annual result look strong in the face of toughest banking market for nearly two decades, it is the quality that counts.

A cash profit of $4.42 billion for the year to end June comes in slightly ahead of consensus expectations of $4.28 billion but falls within the top end of an analyst range.

The annual result was down 7 per cent on the year mainly on the back of rising bad debts, but the earnings drop was cushioned by a $612 million one-off gain from the deeply discounted acquisition of BankWest late last year.

At the same time a further boost from earnings came from an effective tax rate of 25.8 per cent. This was unusually low given hefty investment allowance deductions and more income coming from low tax jurisdictions. Elsewhere, second half momentum ranging from retail banking to institutional appeared to stall.

As expected CommBank slashed its dividend by 25 per cent, falling into line with a move by its other big bank rivals. The final dividend of $1.15 takes CBA’s total dividend yield of 5.2 per cent.

BankWest bonanza

For CommBank chief executive Ralph Norris, BankWest has provided nothing but upside. Not only did CommBank actually write up the value of the deeply discounted $2.1 billion buy, it has upgraded expected synergy from the deal by $30 million.

At the same time CommBank reveals it secured a discount by as much as $367 million on the BankWest purchase price following a long running negotiations with UK lender Lloyds TSB. However, this was tipped into BankWest’s balance sheet, which was the focus of the dispute.

CommBank, which is the only major bank with an end-June balance date, provides an important barometer into the health of the sector. Rivals such as Westpac and National Australia Bank start handing down their results from late October.

The bad debt expense of $2.935 billion represents 0.72 per cent of average loans to acceptances, which is higher than analyst expectations.

While this is well up from 0.26 per cent this time last year, this figure is down from a peak of 0.81 per cent in the December half, suggesting the big corporate losses may have washed through the system.

Interestingly, CBA’s rate of arrears on housing loans is yet to show signs of a drop, particularly with arrears in Western Australia and Queensland staging a late surge. Smaller lender Bendigo Bank this week said arrears on mortgages were starting to trend down.

CommBank’s revenue growth of 14 per cent picks up pace over last year’s 10 per cent while it has improved its performance on cost growth which came in at 4 per cent compared to last year’s 9 per cent.

This so-called widening jaw helped CommBank’s cost-to-efficiency ratio, which dropped to 44.6 per cent from 48.9 per cent.

Cost claw-back

As a positive to investors, CommBank managed to claw back soaring costs of wholesale funding as it pushed through out-of-cycle interest rate rises. This helped to fatten net interest margins by 9 basis points and keeping them above the crucial 2 per cent mark.

However, pressure remains, with margins softening slightly in the second half. This is something the bank is looking to reverse.

To be sure, CommBank’s message to customers on future interest rises is blunt: "I don’t think there’s any doubt we will reprice where necessary," Norris says.

BankWest provided its first full six month contribution, adding $113 million to cash profit after tax. Stripping out this impact, CommBank’s cash profit of $4.3 billion would have been down 9 per cent.

CommBank provides its trademark caution in terms of the outlook, noting while there are signs of the beginnings of an economic recovery, particularly in Australia, there is still a degree of uncertainty and "significant risks on the down side" with unemployment expected to rise.

Also, the bank predicts a cooling of housing market. This could be a significant headwind for Commbank which is the nation’s biggest mortgage bank.

However with signs the worst of the market dislocated and large corporate losses behind it, CommBank’s shares surged 2.2 per cent in early trade, and maintained the gains into mid-afternoon. The latest rally comes on top of gains of almost 10 per cent over the last two weeks, a rise of more than 80 per cent from its January lows.

Elsewhere, CommBank taps its hybrid capacity to raise an additional $700 million(bank regulators prefer to keep this form of capital limited to 25 per cent of total capital).

This is the first large hybrid issue of the year, suggesting signs of life could be returning to the market which has remained stalled since September.

This issue will help pump-up CommBank’s tier one ratio from its current level of 8.07 per cent to around 8.31 per cent, which is more in line with its major rivals.

As an aside, Norris pours water on some suggestions he was planning to retire, but following a string of mishaps over the past year ranging from the bank’s disastrous involvement with aggressive financial planner Storm Financial; breakdowns in internet banking; to being exposed to highly-leveraged companies such as ABC Learning; Norris chose to break the bank's long-standing policy of a black-out on pre-profit briefings to go on a public relations offensive.

But after already being caught out soft-sounding investors on last year’s $2 billion capital raising, his latest effort probably won’t win over the hearts and minds of regulators.

ejohnston@theage.com.au

 

[nomore4s]

Interesting to read about the $700m+ they are raising via the PERLS V issue announced today.

Has anyone invested in any of the other PERLS? And were you happy with it?

Any hidden pros and cons of investing in something like PERLS?

 

[boofhead]

The prospectus lists a lot of cons. Have a read of it.

I had a look at the history of PERLS III and IV. Appears they have traded some periods below their face values. Would I be correct to assume that is mostly related to the lower interest margin? So their price is much tied to interest rates.

PERLS V seems to have a better interest margin so that is likely to trade at better prices compared to III and IV?

 

[nomore4s]

The prospectus lists a lot of cons. Have a read of it.

I had a look at the history of PERLS III and IV. Appears they have traded some periods below their face values. Would I be correct to assume that is mostly related to the lower interest margin? So their price is much tied to interest rates.

PERLS V seems to have a better interest margin so that is likely to trade at better prices compared to III and IV?

Thanks boofhead.

I have read the propectus but I was just interested to see if people who had invested in them before had anything else to add.

I would be looking to hold them for the full 5 years so I'm not too concerned about what they are trading at, would just be looking for the dividend return.

 

[boofhead]

I can't provide advice. When I read of the news I was annoyed CommSec didn't send me an email of the news. Most of the possilities are ok for my needs. I liked the more favourable interest margin although I would have preferred it to be 1% higher - similar to a couple of hybrids of this year. Possibly fully franked has benefits. The reporting of reserve lifing rates by end of year which will hopefully push 90 day BBSW up helps too. I have no idea what will play out though - I'm a newbie. My concern is how Centrelink will treat me.