CBA profit ‘uninspiring’ as ANZ walks back cashback
Commonwealth Bank’s $10.2 billion profit was denounced as “uninspiring” by banking analysts, undermining the Greens’ argument for a new super profit tax to rein in corporate oligopolies as bank margins suffer from further degradation.
In a further sign of mounting pressure on returns, ANZ on Thursday told brokers it will slash its cashback offer for refinancing customers from $4000 to $2000 as of August 26. ANZ is the only major lender left with such an offer, which some industry figures believe has led to unprofitable loans being written.
Commonwealth Bank CFO Alan Docherty and CEO Matt Comyn presenting its $10.2 billion full-year profit in Sydney on Wednesday.
Some brokers were compelled to downgrade earnings forecasts for CBA a day after its record annual profit was delivered, citing revenue pressures from ongoing competition that crimped its net interest margins – a key measure of profitability – in the June half. According to chief executive Matt Comyn, margins will continue to tighten.
E&P Capital analyst Azib Khan said forecasts for lower margins and higher costs reinforced his “sell” rating on CBA and “uninspiring” assessment.
Furthermore, the quality of its loan book “is of increasing concern”, he said, pointing to new and increased impaired assets in the second half totalling $1.5 billion, the highest level since the first half of 2013, as customers struggle with higher interest repayments.
Morgan Stanley analyst Richard Wiles remained “underweight” CBA, with earnings set to fall in the 2024 financial year. “Risks are skewed to the downside, and trading multiples remain expensive,” he said, referring to CBA’s valuation.
“We haven’t significantly changed our view on the outlook given ongoing headwinds from
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