(Bloomberg) — Commonwealth Bank of Australia shares fell after the country’s biggest lender reported earnings that underwhelmed analysts with further pressure expected on margins.
Cash profit from continuing operations rose 4% to a record A$10.25 billion ($6.7 billion) for the 12 months ended June 30, in line with the A$10.26 billion average estimate of analysts surveyed by Bloomberg. This is the firm’s first result since February 2023 that is not likely to see consensus upgrades, according to Barrenjoey analyst Jonathan Mott.
The stock lost as much as 4.8% in Sydney, the most since early April. Expectations were high heading into Wednesday’s results, with the shares up about 29% over the past year, and hitting an all-time high in June when its market capitalization climbed above $200 billion.
The bank’s net interest margin is expected to decline 10-15 basis points in 2026 from 2.08%, as falling benchmark interest rates in Australia weigh on margins across the industry, Bloomberg Intelligence said. Its cash profit could drop 12-15% in fiscal year 2026, according to BI.
CBA Shares Drop on ‘Weak’ FY Results Composition: Street Wrap
“Consumer confidence has improved, but households remain stretched,” said Chief Executive Officer Matt Comyn. “We continue to watch global events closely, which remain unpredictable and volatile.”
Profit in the firm’s key retail banking services division rose 2% on the prior year to A$5.4 billion, while business banking saw an 8% climb to A$4.1 billion. The bank will pay a final dividend of A$2.60 per share.
CBA said operating expenses increased 6% driven by inflation and accelerated investment in technology, though that was partly offset by productivity initiatives. Loan impairment expenses dropped as economic conditions improved.
Comyn indicated that consumers and households are seeing benefits from lower borrowing costs.
“Pleasingly, many households have seen a rise in disposable incomes due to the recent relief from reduced interest rates, lower inflation and tax cuts,” he said.
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