Yahoo Finance Commonwealth Bank's record $7.7 billion cash splash for millions of Aussies
Despite a smaller profit this year, CBA is still giving out huge dividends to shareholders.
Commonwealth Bank (CBA) is handing out a record $7.7 billion in dividends for shareholders despite profit falling slightly. Australia's biggest bank announced a $9.48 billion profit for the 2024 financial year ($9.8 billion in net after-tax profit), which is 6 per cent lower than the previous year.
However, CBA will be giving nearly 80 per cent of that profit back to investors with a $4.65 per share fully-franked dividend, which is up 15 cents from last year. Bank CEO Matt Comyn said it will be a welcome return for many during the cost-of-living crisis.
"We know the importance of that dividend," he said.
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When do I get my CBA dividend?
CBA revealed that the final dividend, which is $2.50 per share, will be paid out to investor's accounts on September 27.
Investors will have to wait until March 2025 before the next dividend is handed out after the bank's half-yearly results are published.
The $2.50 per share final dividend was higher than the $2.41 expected by analysts and 3 per cent higher than last year.
CBA said it aims to give between 70 to 80 per cent of its profits back in the form of dividends.
The bank added that approximately $8 billion had been paid in dividends and share buy-backs benefiting more than 13 million shareholders.
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Times are tough but CBA supports RBA holding interest rates
Comyn acknowledged that times are tough for many Aussies who are battling a "fall in real household disposable income", and that is reflected in the bank's smaller profit.
Despite this, he supports the Reserve Bank of Australia (RBA) keeping interest rates where they are until inflation comes down.
“Inflation is falling, but the pace has slowed,” Comyn explained to The Australian Financial Review.
“What we are seeing consistently, in conversations with customers and with our borrowers, is that people are feeling the toll of higher prices.
"The most important thing, I think, is to get inflation down.”
While Aussies have complained the 4.35 per cent cash rate, which has been in effect since November after more than a dozen rises, has put incredible pressure on their finances, the RBA has been insistent that inflation is still too high to warrant mortgage reprieve.
However, CBA economists are still predicting the first rate cut will come before Christmas, making it the only bank in the big four still crossing its fingers and toes for action this side of 2024.
CBA head of Australian economics Gareth Aird said the overall message from the RBA was “a little more hawkish” than anticipated.
“But given the RBA is highly data dependent it will ultimately be the data that determines the outlook for monetary policy,” he said.
“Recent events offshore, particularly in the US, highlight that the picture can change quite quickly if the data makes the case. And history shows that central banks can turn on a dime if outcomes deviate from their expectations (in either direction).”
Arrears on the rise for many Aussie homeowners
When CBA released its full-year results, it revealed that the rising cost of living is increasing home loan arrears.
Arrears in expired fixed-rate home loans have jumped noticeably, up from 0.92 per cent to 1.3 per cent, though below the 15-year average of 1.38 per cent.
Home loans in 90-plus days of arrears have jumped from 0.47 per cent to 0.65 per cent, though sit level-par with the historical average, and a tick below 2019 levels.
The majority of home loan borrowers remain ahead of scheduled repayments, the bank said.
Personal loans in arrears of more than 90 days have climbed to 1.5 per cent, above the 1.25 per cent average for the past 15 years.
While home and personal loan arrears sit close to or above 15-year averages, credit cards in 90-plus days of arrears dipped slightly to 0.74 per cent, below the 0.94 per cent historical average.
- with NCA Newswire
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