Commonwealth Bank (CBA) Interim Result First Impression

We are satisfied with the result. At first glance met consensus in terms of key items: cash NPAT, EPS and DPS (although we were hoping for a higher DPS and EPS). Market could be disappointed about the lower CET1 (not us) but the bank had a better half since June 2015 in terms of 3% positive “Jaws”, stable NIM, lower cost ratio, stable market share and stable credit quality. Income growth remains strong and all divisions except Institutional Bank and International (no surprises) performed well. This is a good performance from CBA. Cash EPS 285cps (BP 287cps, consensus 285cps); Neutral “Jaws” pcp (BP neutral “Jaws” pcp); CET1 10.2% (BP 10.2%, consensus 10.4%) BDD charge $564m or 17bp of GLA (BP $519m or 17bp, consensus $522m or 16bp).