Commonwealth reports mixed results for FY 2024, including 2% profit drop

Commonwealth Bank of Australia (ASX:CBA) has seen its share price trade virtually flat, despite telling investors today that its profits had recorded a fall both for the whole fiscal year ending on June 30, and compared to its performance in the first half of the year.

In its full year results announcement, CBA noted that its net profit after tax (NPAT) for the 2024 fiscal year was $9,836 million – down 2% on FY23, as well as representing a 4% drop since the first half of the year.

The lower profit – which was still higher than what the market had priced-in – was explained as a result of inflation-impacted operating expenses, which were offset by a lower loan impairment expense.

Operating expenses came in at $12,218 million, with this being 3% increase from the previous fiscal year, as well as another 3% increase compared to the first half: and again inflation – plus an increased spend in technology to deliver strategic priorities – was behind the figure.

Nevertheless, CBA said that behind the figures lay evidence of volume growth in its core businesses, also revealing a dividend of $4.65 per share, fully franked – an increase of 3% from FY23.

CEO Matt Comyn agreed that Australians were doing it tougher under current market conditions, but added that the bank was well set up to support customers in this context.

“Our results demonstrate our continued focus on supporting our customers, our disciplined operational and strategic execution, and the strength of our balance sheet,” he said.

“Many Australians continue to be challenged by cost-of-living pressures and a fall in real household disposable income.

“With slower economic growth and moderating demand, our strong balance sheet allows us to continue to support our customers and the broader economy, and deliver sustainable returns.

“We have made it easier for our customers to access hardship assistance; provided eligible homeowner customers with the option to suspend mortgage repayments; and supported all customers with access to money management tools.”

However, commentators such as Saxo Asia Pacific Senior Sales Trader Junvum Kim suggested the presence of some underlying negative features among these results.

“Competitive pressures are significantly impacting CBA’s net interest margin (down 8 basis points year on year to 1.99%), leading to half-on-half declines across nearly all units,” he said.

“Furthermore, the rise in impairment provisions is emerging as a notable negative factor.”

At 13:05 AEST, CBA shares were trading at $133.32, a rise of 0.6% since the market opened.