Commonwealth Bank 2020 Full Year Report | ASX: CBA

Commonwealth Bank has come out with their Full Year Report and cash profits have fallen with shareholders being able to receive dividends of 98 cents fully franked.

In this video I'm going to touch on some important points and the forecasts for the near future and how CBA is dealing with it.
f we look at who and where deferrals are taking place, it seems like a large portion of them are from NSW who may have also over leveraged for certain properties, since we know how much of a hot property market that is. In saying that though, this doesn’t look too bad at the current rate given only 8% of all CBA accounts are asking for a deferral of payments when headlines that we were reading a couple months ago would have us thinking otherwise.

Interestingly a good portion of the money in its operating expenses which is $10B has been put towards IT, which has gone up by 7% to match with risk and compliance but I imagine also to make sure all the apps and online platforms are working correctly as people are unable to head into branches anymore and documents, communication and approvals are all being sent online. That of course has allowed it to retain it’s #1 ranking of being Australia’s best digital bank and having used many other banks apps, I would have to agree I still prefer CBA’s interface and how quick it is to transfer and receive money.

Now when we’re looking at comparisons CBA makes against it’s peers, its far ahead when you’re looking at deposits, the amount of home loans but more interesting for shareholders is its total return in comparison to its peers which is miles ahead. Whilst most banks were still within the $20s in share price, CBA was floating near $80 and a strong stream of dividends which was about $4-5 per year, fully franked of course.

Given this is a channel that talks about shares and businesses we can’t ignore their Commsec subsidiary and how that’s performing and first I want to touch on their latest product in Commsec Pocket which has seen a great rise in popularity, how popular well..

Within its first year of launch it has gained 100k customers with $177m invested which is basically saying the average person has invested $1,770 when the minimum is $50 to be invested across their 7 themed ETFs.
Now if that’s not impressive in regards to how much money they make in total through their trading business you’re looking at $940M, a lot of which does come through commissions in trading but also includes the money they make on international money transfers, which has been slowing down but their frequency of trading whether its through commsec or commsec pocket has increased drastically in volume.

I mean this report is rather lengthy but what was interesting to me is that although interest rates are at an all time low which was a large concern for many retail banks because that lowers their interest income. But the basics of economics from the RBA lowering rates has reached the desired results of having higher volumes of lending take place, that of course with the help of the federal governments handing out grants and stimulus payments in job keeper.

Overall this has allowed the bank to perform really well with a good source of money for CBA coming from their divestments of some of their other businesses, which includes their life insurance business. This obviously gives them more cash but also removes any overhead and risks operating in these various businesses.

If it was not for the loan impairment expenses, funnily enough it would be up on a year on year basis, but it has said that they are in a good financial position and so is the country overall and its been so good they are still able to pay out a dividend of 98c, which I imagine is to also fall in line with APRA’s guidelines of paying out about 50% of their net profit.

Видео Commonwealth Bank 2020 Full Year Report | ASX: CBA канала Lee Vo