CBA - Commonwealth Bank of Australia

[Ann]

First MYR cut staff, then BHP and now it is CBA. Let's see if these companies are rewarded with a higher stock price.

Commonwealth Bank Mulls Plan to Cut 10,000 Jobs, Paper Says

Commonwealth Bank of Australia is working on a plan to cut more than 10,000 jobs and about A$2 billion ($1.4 billion) of costs, the Australian newspaper reported, without saying where it got the information.

The nation’s largest lender is said to be considering closing as many as 300 of its almost 1,000 branches, the paper said. A reduction of 25 percent of its workforce could see 10,000-12,000 jobs go in coming years, the report said. More...

 

[qldfrog]

More baristas again?
I am sad for the individuals involved
And only so many new jobs created by the online move, most in Bangalore

 

[Value Collector]

More baristas again?
I am sad for the individuals involved
And only so many new jobs created by the online move, most in Bangalore

I think if a company doesn’t need workers it’s healthy to let them go.

Other wise we may as well ban bulldozers, and force companies to employ hoards of people with shovels instead.

————-
There are a lot better things to do in life than work 9-5 for 5 days a week for 45 years.

I am in favor of building an economy that is 100% automated, and no one needs to work.

We are in early stages of course, but things like this need to happen to get to the final outcome.

 

[sptrawler]

The Royal Commission would have caused a lot of processes and functions to be tested, internal audits of the processes would have highlighted problems with procedures and reporting functions, outcomes aren't always what people expect.
It obviously wont be business as usual, probably the other banks will follow suite, they all obviously had problems with reporting and accountability procedures, maybe they all became too big to manage?

 

[sptrawler]

First MYR cut staff, then BHP and now it is CBA. Let's see if these companies are rewarded with a higher stock price.
.

On the subject of BHP, all the major mining companies are investing heavily, in autonomous operations.

 

[rederob]

The Royal Commission would have caused a lot of processes and functions to be tested, internal audits of the processes would have highlighted problems with procedures and reporting functions, outcomes aren't always what people expect.

I continue to hold CBA.
However, there was a culture of profit and managers aspired to make greater profits and receive higher performance bonuses.
The internal procedures were not such an issue that I am aware. The fact is that the Commission was able to use standard reporting information to identify where customers were being ripped off.
Any suggestion that banks were not aware of what they were doing is, imho, a long way from reality.
Instead the banks liberally pressured politicians to stymie a Royal Commission knowing full well they were culpable.
They got caught.
The government of the day took credit.
Check Hansard to see how many times they rejected calls for the Commission.

Back to CBA, they will take a few hits to their bottom line, but they only need to ratchet customer costs by fractions of a percent to offset these. Even without an imputation credit it delivers a rate of return at the top end of those in the ASX200.

 

[sptrawler]

I continue to hold CBA.
However, there was a culture of profit and managers aspired to make greater profits and receive higher performance bonuses.
The internal procedures were not such an issue that I am aware. The fact is that the Commission was able to use standard reporting information to identify where customers were being ripped off.
Any suggestion that banks were not aware of what they were doing is, imho, a long way from reality.
Instead the banks liberally pressured politicians to stymie a Royal Commission knowing full well they were culpable.
They got caught.
The government of the day took credit.
Check Hansard to see how many times they rejected calls for the Commission.

Back to CBA, they will take a few hits to their bottom line, but they only need to ratchet customer costs by fractions of a percent to offset these. Even without an imputation credit it delivers a rate of return at the top end of those in the ASX200.

What I was alluding to was, long lines and chains of command and reporting, are very difficult to manage especially on a large scale.
One just has to look at RCR, from what I read they went belly up, due to faulty project management procedures at a remote contract site.
I have carried out project management, over multiple sites concurrently, it is a nightmare to know exactly what is going on, at the macro level.
With a major bank covering the continent as well as international exposure, delegation would be standard practice, but as is known you can delegate responsibility but not accountability.
I am sure that post the Royal Commission, management will be much more aware of their responsibilities.
I wasn't making a point one way or another, just saying complacency works its way into every system. I would think the Commission, has certainly given boards a well deserved reminder, of why they are paid so much.
I loved your last comment, all the bank has to do is screw the customer. lol priceless.

 

[bigdog]

Motley reported today
https://www.fool.com.au/2019/05/13/...r-it-reported-a-28-crash-in-quarterly-profit/

Is the CBA dividend safe after it reported a 28% crash in quarterly profit?
Brendon Lau | May 13, 2019

The Commonwealth Bank of Australia (ASX: CBA) share price will be in focus today as our largest ASX-listed bank released its quarterly update that will give shareholders a few things to worry about.

The CBA share price has been outperforming the market over the past month as we headed into the bank reporting season with a gain of 4.4% when the S&P/ASX 200 (Index:^AXJO) (ASX:XJO) index inched up 1%.

CBA big impairment and profit hit
CBA took a big profit hit in 3QFY19 as it made a $714 million provision to compensate aggrieved customers and that meant its cash profit for the period crashed 28% compared to the average of the first two quarters of the financial year. Even if one-off costs were excluded, underlying cash profit is still down a considerable 9%.

Perhaps analysts won’t be too fazed by the news as consensus underlying earnings per share forecast for FY19 is tipped to drop around 8% from the previous year.

The big new provision takes the total amount CBA has set aside for wronging customers to over $2 billion. This is the fallout from the Hayne Royal Commission, which exposed unethical and sometimes illegal activities by our largest financial institutions.

Loan book still growing
The bank’s chief executive Matt Comyn is also putting on a brave face as he touted CBA’s “sound business fundamentals” and said “momentum [has been] maintained in a challenging operating environment”.

After all, CBA has managed to lift the number of home loans its written by 2.5% in the quarter, which implies it’s holding on to its market leading position. The volume of new business loans also increased by 2.3% and household deposits were up 2.8%.

However, no word on whether the size of more mortgages is shrinking in light of tighter lending conditions and consumer arrears (past 90 days) are ticking up, although its coming from a low base and credit quality still looks good for the bank – at least for now.

Are CBA’s dividend safe?
Investors may also be concerned to see the bank’s capital adequacy ratio fall in the period. The Common Equity Tier-1 (CET1) ratio dipped to 10.3% from 10.8% after the interim dividend payment to shareholders were deducted.

This may prompt some bank bears to think that CBA dividends can’t be banked on. So far, only NAB has cut dividends and its share price has reacted positively to the news – a fact that won’t be lost on its rivals and may prompt some boards to follow.

What’s clear from the results is that the big banks need a rate cut or two from the Reserve Bank of Australia (RBA) as badly as stretched consumers.

The probability of rate cuts is high and it’s more a question of “when”, not “if”. This makes me think that bank stocks may have found their footing even though the operating environment is likely to stay hostile until 2020.

 

[barney]

I personally watch Specs mainly … but given most Aussie Investors would likely have CBA on the top of their watch list, I figure this thread may as well be bumped with a bit of recent news.

Some Substantial shareholder announcements and a chart showing some recent weakness … although still a lot higher than @bigdog 's post back in May

 

[Toyota Lexcen]

CBA has made an investment with BNPL group from abroad.

Can’t see this going well, APT really have a strangle hold on the sector.

 

[bonox]

A potential difference is that Klarna will probably work on low margin high volume on any purchase (ie not retailer dependent) where Afterpay and ilk are the opposite and also charge (specific) retailers much higher fees. Could potentially be driven more from the retailer side than by customers.

 

[Dona Ferentes]

$90 a share. not bad for a dinosaur bank under siege from
1. royal commission,
2. declining growth, and
3. fintech.

(2 out of the three essentially toothless <you guess which!>)

 

[Knobby22]

$90 a share. not bad for a dinosaur bank under siege from
1. royal commission,
2. declining growth, and
3. fintech.

(2 out of the three essentially toothless <you guess which!>)

Nearly back to the price it was in 2015!

 

[Dona Ferentes]

Nearly back to the price it was in 2015!

Whatever. I bought in at the Float in 1991. $5.40 a share. (and DRPs until 1997, then participation in occasional SPP or rights).

Otherwise, just luvin' the dividends. The question should be; what are you buying now?

 

[Knobby22]

Whatever. I bought in at the Float in 1991. $5.40 a share. (and DRPs until 1997, then participation in occasional SPP or rights).

Otherwise, just luvin' the dividends. The question should be; what are you buying now?

I bought at that float too. No longer own. Sold at $80 To help buy new house.
It has been a great company, can it go back to greatness? That is another question.

Still as you suggest considering the original capital been a big winner.

Should also say, the dividends are great in this low interest rate environment.

 

[sptrawler]

It is hard to find another sector, that is so linked to our population.

 

[Dona Ferentes]

It is hard to find another sector, that is so linked to our population.

And the economy. Which sneezed (Covid-19)

Financials have been the biggest weight on the local market this week, as investors weigh the impact of further cuts on bank margins.

The big four were quick to pass on the full cut to their customers, but the threat to their dividends have prompted heavy selling.

In the days since the RBA cut, the financials index is lower by 6.1 per cent, led by a 7.1pc decline in CBA

 

[Garpal Gumnut]

I am predicting CBA will fall.

To $42

Or $24

A 10 year monthly chart shows lines of support and resistance at the $60 and $45 mark.

Breaking below the $60 mark is a given on price action this month and supported by the RSI.

In uncertain times it may bob below $45, and there is much clear air below that.

I would be reading weekly rather than daily charts and monthly as one would a weekly.

It is too volatile a situation to be predicting daily unless one is a skilled day trader.

gg

 

[Dona Ferentes]

well, I suppose in late2007/08/early09 it did a 50+% retracement ($61 to $27 at extremities) but was back to $55 before 2010. Raised capital March 09

But what others will take from this is how dividends flowed; no 50% retracement there. (1.07, 1.47 in 2007, 1.13 & 1.53 ('08), 1.13, 1.15 (09), & by Apr '10, 1.20)

 

[sptrawler]

If CBA goes below $30, you can put me down for some.
I am wondering what people are basing the really big falls on, other than the media hype? The only people that are getting sick in large numbers, are old or infirm, working age people aren't getting overly sick from reports.
So other than the disruption caused by businesses, maybe closing short term, what is going to cause the massive disruption to the financial sector?