Commonwealth Bank of Australia (CBA)

Welcome to InvestSMART

You are currently viewing our site as a guest, which gives you limited access to our site features. By signing up for a free membership, you will receive our Investment Opportunity newsletters and have access to additional features for finding and comparing managed funds and shares. Registration is fast and simple, so please:

Sign Up Today » it's FREE! Already a member? Login now!

General Information
Company Name: Commonwealth Bank of Australia
Stock Code: CBA
GICS Sub-Industry: Diversified Banks
Market Cap ($M): 130,484
Equiv. Shares (M): 1,621

Current Price Data+
Current Price Open High Low Last Close Volume Price Movement
 $ 80.480 $ 80.500 $ 80.550 $ 79.980 $ 80.170 11,241,762 $ 0.310  0.387 %

Current Broker Consensus Recommendation more
Recommendation: Buy (2.3333)
Recommendation Date: 30th Oct 2014
Brokers Surveyed: 3

Company Overview

Business Description:
Commonwealth Bank of Australia (CBA) is an Australian retail bank. Its core business is the provision of a broad range of banking and financial products and services to retail, small business, corporate and institutional clients. CBA conducts its operations primarily in Australia, New Zealand and Asia Pacific region. It also operates in several countries including United Kingdom and USA.

Strategy Analysis:
CBA generates superior shareholder returns by optimising revenue growth, productivity, capital efficiency and staff culture. The strategy is to invest in the competitive advantages that are difficult to replicate. The bank specifies its three primary sources of advantage as industry-leading application of technology to financial services, a customer-focused staff culture and a strong balance sheet. Each of these respectively supports returns on equity by making CBA more attractive to customers in a multi-channel banking world (an intangible asset), enhancing customer loyalty and satisfaction (another intangible asset), and reducing bad debts expense below peers´ (a cost advantage). Lower losses on bad debts give CBA more room to price keenly to win and retain business while remaining sufficiently profitable. The group will continue to invest in all three sources of advantage. CBA´s industry-leading technology initiative is the $1.1bn Core Banking Modernisation project, which rolled out real-time banking and same-day settlement across the depositor and borrower customer base. The project is effectively complete and CBA will be the only major bank offering these features across its customer base, an advantage which will take competitors years to replicate given the project was launched in 2008. CBA´s policy on acquisitions is to acquire only when it can create more value for shareholders than they can create for themselves. Commonwealth Bank of Australia reported NPAT up 1% to $3.66bn for the half-year ended 31 December 2012. Cash NPAT for the current half was $3.78bn, an increase of 6%. Revenues from ordinary activities were $22.92bn, down 4% from the same period last year. Diluted EPS was 221.7 cents compared to 222.1 cents last year. Net operating cash flow was $3.62bn compared to $8.34bn last year. The interim dividend declared was 164.0 cents compared with 137.0 cents last year. While many of the group's customers are facing challenges, this is not translating into a deterioration of credit quality. However, given the uncertain outlook for both the global and domestic economies, the group remains cautious maintaining a strong balance sheet with high levels of capital, provisioning and liquidity - $128.0bn as at 31 December 2012.

Financial Summary
Year to Jun NPAT EPS EPS chg (%) PER DPS Yield (%) Franking (%)
2016  F 9,782.3 592.5 5.2 13.6 444.0 5.5 100.0
2015  F 9,180.1 563.0 5.0 14.3 422.0 5.2 100.0
2014  A 8,635.0 536.0 10.3 14.1 401.0 5.3 100.0
Source: Morningstar analyst estimates.

Peer Comparison
EPS Growth (%) P/E (%) Dividend Yield (%)
Company Mkt Cap 2014 A 2015 F 2016 F 2014 A 2015 F 2016 F 2014 A 2015 F 2016 F
ANZ Bank (ANZ) $91,685 M -0.0092 0.1690 0.0483 15.3761 13.1535 12.5472 4.93 5.31 5.58
Bendigo Adelaide Bnk (BEN) $5,568 M 0.1222 0.1687 0.0693 14.7533 12.6239 11.8058 5.18 5.47 5.79
Commonwealth Bank (CBA) $129,981 M 0.1201 0.0600 0.0518 15.1281 14.2712 13.5686 5.00 5.26 5.54
National Aust. Bank (NAB) $81,951 M -0.1382 0.2959 0.0663 16.2210 12.5176 11.7388 5.72 5.98 6.39
Westpac (WBC) $107,138 M 0.0657 0.0867 0.0126 15.3579 14.1328 13.9571 5.63 5.50 5.51

Market Comparison
Earnings P/E Ratio P/B Ratio P/E Growth
CBA 0.88 14.9 2.66 2.66
Market 0.94 15.8 1.24 1.88
Sector 0.87 14.2 1.37 1.74

Name Position Start Date
Mr Brian Long Director 01 September 2010
Mr Ian Narev Managing Director,Chief Executive Officer 01 December 2011
Mr David Turner Non-Executive Chairman 01 August 2006
Mr Andrew Mohl Non-Executive Director 01 July 2008
Ms Sarah (Carolyn) Carolyn Hailes Kay Non-Executive Director 05 March 2003
Sir David H Higgins Non-Executive Director 01 September 2014
Ms Jane Sharman Hemstritch Non-Executive Director 09 October 2006
Mr Harrison Hurst Young Non-Executive Director 13 February 2007
Sir John Anthony Anderson Non-Executive Director 12 March 2007
Ms Launa Karen Inman Non-Executive Director 16 March 2011
Mr Shirish Apte Non-Executive Director 10 June 2014

Name Position
Carla F Collingwood Assistant Company Secretary
Margaret Taylor Company Secretary
Alden Toevs Group Chief Risk Officer
Grahame Petersen Group Executive, Business and Private Banking
Michael Harte Group Executive, Enterprise Services and Chief Information Officer
David Craig Group Executive, Financial Services and Chief Financial Officer
Robert Jesudason Group Executive, Group Strategic Development
Melanie Laing Group Executive, Human Resources
Kelly Bayer Rosmarin Group Executive, Institutional Banking and Markets
Simon Blair Group Executive, International Financial Services
Matthew Comyn Group Executive, Retail Banking Services
Annabel Spring Group Executive, Wealth Management
David Cohen Group General Counsel and Group Executive, Group Corporate Affairs

Calendar of Events
Date Event
01 October 2015 Report (Annual)
17 August 2015 Report (Annual)
12 August 2015 Report (Prelim)
11 February 2015 Report (Interim)
12 November 2014 AGM
© 2011 Morningstar, Inc. All rights reserved. The data and content contained herein are not guaranteed to be accurate, complete or timely. Neither Morningstar, nor its affiliates nor their content providers will have any liability for use or distribution of any of this information. To the extent that any of the content above constitutes advice, it is general advice that has been prepared by Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892 (a subsidiary of Morningstar, Inc.), without reference to your objectives, financial situation or needs. Before acting on any advice, you should consider the appropriateness of the advice and we recommend you obtain financial, legal and taxation advice before making any financial investment decision. If applicable investors should obtain the relevant product disclosure statement and consider it before making any decision to invest. Some material is copyright and published under licence from ASX Operations Pty Limited ACN 004 523 782 ("ASXO"). DISCLOSURE: Employees may have an interest in the securities discussed in this report. Please refer to our Financial Services Guide (FSG) for more information at


Trade Shares Online from $19.95^
Free Guides

The SMH Guide to Investing in Art

An educational booklet with useful, practical tips to help you make better-informed decisions about investing in art.

More details...


Prices slashed - everything must go!

Nick Swales, Regional Director, Newcastle Office, Rathbones 27/10/2014 | “If you want to have a better performance than the crowd, you must do things differently from the crowd.” Sir John Templeton.

Aussie share market bulls now have company

Ric Spooner (Chief Market Analyst, CMC Markets) 20/10/2014 | Today, Australian investors will not have to go it alone buying stocks as they did for much of last week. Bargain hunters this morning will be supported by the morale boosting encouragement of a 3% turnaround in the German Dax and a 264 point rally in the Dow Jones.

The Importance of Ignoring the Noise of the Market

Carl Richards, director of investor education at the BAM Alliance 17/10/2014 | “As odd as it may sound, the sooner you start treating your investments like you treat life, the happier you’ll be with the outcome.”

You only dance twice

William H. Gross, Janus Capital Group 16/10/2014 | “Financial markets are artificially priced. In the bond market, there is nothing normal about a three year German Bund yielding “minus” 10 basis points.”

The Big Picture - Australia 200 Index

CMC Markets 8/10/2014 | Share market indices around the globe are breaking down. While analysts cast around for reasons, it’s clear that a time factor is in play. Simply put, many investors “feel” a correction is overdue. How low could it go?

Billionaires bankroll Ten's new direction Media Network sees digital future

The Age 19/12/2013 | Ten Network's programming ambitions will be funded by a $200 million loan guaranteed by three of its billionaire owners, as the free-to-air broadcaster declared digital was the future and pointed to early signs that its switch to an older market demographic was working.


Sponsored Links