CBA announces $5b capital raising and record $9.14b profit

The Commonwealth Bank of Australia has launched a $5 billion equity raising to boost its balance sheet in response to new regulatory requirements. The bank has also posted a full-year cash profit of $9.14 billion.

The Australian reported that the result is another fresh record and is mostly in line with analysts’ expectations, which had also centred on a $9.1 billion result. Net profit for the period also rose 5% to $9.06 billion.

CBA would work on the $5 billion equity raising by offering eligible shareholders one new share for every 23 existing shares at a price of $71.50 each. CBA’s move comes after NAB’s $5.5 billion capital raising in June, and ANZ’s $3 billion capital raising last week.

CBA Group Chief Executive Officer, Ian Narev said: “This financial year saw all-time highs in retail customer satisfaction, with the Group returning to the number one position at year-end, and ongoing high levels of customer satisfaction in our other businesses.”

“As a result, our balance sheet continued to grow, and combined with ongoing margin discipline, this resulted in good levels of revenue growth given market conditions. We also maintained our focus on productivity, which is particularly important given increasing levels of regulatory and compliance costs,” he continued.

During the year, the bank’s net interest margin (NIM) decreased by 5 basis points to 2.09% year-on-year driven by the dipping cash rate and an increase in liquid assets.

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