CBA Helped to Boost Australian Shares on Wednesday

Australian shares closed at a new record high, for the sixth time in August on Wednesday. The ASX 200 gained 0.3% to end its trading day at 7,584 points boosted by the country’s largest banks and miners. The ASX 200 climbed as high as 7,615 points around midday, nevertheless, lost some of its steam in afternoon trade.

The biggest player on the ASX is the Commonwealth Bank of Australia (CBA), and its shares rose 1.5% to $108.17. The bank’s shares jumped to $108.17 thanks to its results. The bank reported that its annual profit jumped 19.7%. The Commonwealth Bank of Australia said its $8.8 billion profit (from continuing operations) was driven by a sustained economic recovery from the pandemic.

As stated above, shares of CBA rose to $108.17. The Commonwealth Bank of Australia announced a record $6 billion share buyback. The country’s control of the coronavirus pandemic and the resulting swift economic rebound supported banks. Moreover, recent sales of non-core units left the “big four” lenders flush with cash. The “big four” lenders are expected to return a record $26 billion over the next two years.

Australia’s largest lender declared a final dividend of $2 per share, more than double its 98-cent payout last year.

The bank’s chief executive Matt Comyn said the economic recovery continued through most of FY21. In a statement, he also mentioned that the pandemic continues to affect the Australian economy. The CBA’s chief executive warned that the bank expected ongoing economic impacts and future earnings pressure from lower interest rates.

The pandemic is not over yet, and at the moment Australia is trying to deal with the highly contagious Delta coronavirus variant. Millions across the country live under lockdown as authorities are trying to eradicate the virus.

The payout ratio was equivalent to 71% of the Commonwealth Bank of Australia cash earnings. The biggest player on the ASX said it would continue to target a full-year payout ratio of 70-80% of its cash profit. The bank’s loan impairment expense dropped to $554 million, down from $2.52 billion last year.

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