Why The CBA Share Price Jumped 1.3% Today

Commonwealth Bank of Australia [ASX:CBA] jumped 1.3% this morning to $81.7 per share.

Why did CBA jump 1.3% per share?

This morning, Australia’s biggest bank released their annual results for FY17. Cash profits were 4.6% higher than FY16, totalling $9.88 billion. It beat analyst estimates of $9.8 billion.

CBA also increased their dividends per share and reduced their loan impairments, which are loans that likely won’t be paid in full.

But it wasn’t all positive for the bank. As reported by The Australian Financial Review:

CBA said its common equity tier 1 capital (CET1) ratio was at 10.1 per cent, below the 10.5 per cent benchmark set by APRA last month, but said that it was confident it would meet the new benchmark well ahead of the January 2020 deadline.

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CBA CEO Ian Narev said in a statement:

We will continue to strengthen our balance sheet to ensure that we can support our customers through a variety of economic scenarios.

What now for Commonwealth?

As you may already know, CBA has been all over the news, but not for their earnings results. The bank is involved in a money laundering scandal. They failed to report 53,000-odd suspicious transactions. And because of their complacency, executive bonuses are being docked.

Yet, even considering the scandal and fines which could be paid, CBA doesn’t look bad as an investment. They’re the largest lender in Australia. They’re trading around 15-times earnings. And they have a 5.22% dividend yield.

But CBA isn’t the only stock paying healthy dividends. If you’d like to learn about five of the best potential dividend stocks on the ASX this year, click here.

Härje Ronngard,

Junior Analyst, Money Morning


Harje Ronngard is the lead Editor at Money Morning. He’s also the Editor of Wealth Eruption and co-Editor of the Third Wave Portfolio.

The aim of both Wealth Eruption and the Third Wave Portfolio is to find misunderstood opportunities. These are the type of investments that multiply small amounts of money five- to 10-times in size.

Harje has an academic background in investments and valuation. He’s had experience across a range of asset classes, from futures to equities.

For any investment, Harje believes you only need to ask two questions. What is it worth? And how much does it cost? These two questions alone open up a world of opportunities, which Harje shares with Money Morning readers five days a week.


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