Latest With The Major Banks - CBA, NAB, ANZ, WBC

  • May 18, 2019 AEST
  • Team Kalkine
Latest With The Major Banks - CBA, NAB, ANZ, WBC

Recent regulatory compliances and royal commission recommendations are expected to boost buyers sentiments and ultimately help banks across Australia. Few important banks are Commonwealth Bank of Australia (ASX: CBA); National Australia Bank Limited (ASX: NAB); Australia and New Zealand Banking Group Limited (ASX: ANZ); and Westpac Banking Corporation (ASX: WBC). Let’s see how these stocks have performed based on their recent updates.

Commonwealth Bank of Australia (ASX: CBA)

Commonwealth Bank of Australia (ASX: CBA) recently announced that it has become a substantial holder to the Super Retail Group Limited and Link Administration Holdings Limited with a voting power of 5.01% and 5.10%, respectively. In another update, the bank announced the retirement date of Sir David Higgins as a Non-Executive Director on December 31, 2019. Sir David has been a Director of the Bank since September 2014 and has been the Remuneration Committee Chairman and a Risk Committee Member. In its Q3 FY19 results, Commonwealth Bank of Australia highlighted the increase in its common equity Tier 1 ratio by 30 basis points to 10.3%, excluding the 2019 interim dividend impact.

Bank’s unaudited statutory net profit was reported at $1.75 billion in the quarter, wherein cash net profit from continuing operations stood at $1.70 billion. Cash net profit decreased by 9% (Excluding the notable items). Its operating income decreased by 4%, which can be mainly attributed to the combination of seasonal impacts, temporary headwinds and rebased fee income driven by the bank’s Better Customer Outcomes program. Its loan impairment expenses were reported at $314 million in the quarter.

At market close on 17th May 2019, the stock of Commonwealth Bank was trading at $72.830, down 0.682% with a market capitalisation of ~$129.81 billion.

National Australia Bank Limited (ASX: NAB)

National Australia Bank Limited (ASX: NAB) recently announced interest payment of ~$0.728 (Interest rate ~2.888% p.a.) on security NABHA - HYBRID 3-BBSW+1.25% PERP SUB EXCH NON-CUM STAP, with ex-date, record date, and payment date on July 30, 2019, July 31, 2019, and August 15, 2019. In another update, NAB announced issuance of new 48,463 shares at a value consideration of $1,223,969.31. In its H1 FY19 results, NAB highlighted that its dividend was reduced by 16%, given a more difficult operating environment and to improve capital generation. Its dividend payout stood at 77% of cash earnings. It increased its adviser service fees, where the total ongoing advisory fees between 2009-2018 are estimated to be around $1.3 billion. On dividend/distribution front, the Board of Directors declared an interim dividend of 83 cps franked to 100% at the company tax rate of 30%, payable on 3rd July 2019. The record date for the dividend was on 15th May 2019.

At market close on 17th May 2019, the stock of National Australia Bank was trading at $23.920, down 1.157%, with a market capitalisation of ~$68.04 billion.

Australia and New Zealand Banking Group Limited (ASX: ANZ)

Australia and New Zealand Banking Group Limited (ASX: ANZ) recently announced an update on the sale of the OnePath Pensions & Investments (P&I) business under the contractual arrangements with IOOF Holdings Limited. As on May 11, 2019, the coupon rate paid by Australia and New Zealand Banking Group on the debt note subscribed by IOOF Holdings reduced from 14.4% pa to 2% per annum. Australia and New Zealand Banking Group will continue to monitor IOOF Holdings' response in relation to the matter raised by the Australian Prudential Regulation Authority (APRA) prior taking any decision about the transference of the P&I business.

In its first half 2019 results presentation, ANZ highlighted that on the cost front, it has absorbed $550 million of inflation in that time, and took out over $300 million in cost, over and above the benefit it got from selling businesses. On the capital front, it sold 23 businesses and reduced risk-weighted assets in institutional by $50 billion. These and other actions freed up $12 billion of capital, which it used to re-balance its portfolio, return capital to shareholders and invest in targeted growth. On the dividend front, ANZ proposed to pay 2019 interim dividend in three different currencies, namely Australian Dollars, Pounds Sterling and New Zealand Dollars.

The Board has declared a fully franked dividend of $0.80 per share. Its statutory net profit after taxation (NPAT) increased by 4% pcp to NZ$929 million for the six months to 31 March 2019. Its cash NPAT increased by 18% pcp to NZ$1,114 million, due to one-off transactions, which included the sale of the life insurance company, 25% share in Paymark Limited and OnePath Life (NZ) Limited.

Financial Metrics (Source: Company’s Report)

At market close on 17th May 2019, the stock of Australia and New Zealand Banking Group was trading at $25.850, down 3.038% with a market capitalisation of ~$75.53 billion.

Westpac Banking Corporation (ASX: WBC)

Westpac Banking Corporation (ASX: WBC) recently announced that WBC as issuer of Self-Funding Instalments over the securities of National Australia Bank Limited (NAB) notifies of distribution of $0.8300 per security (fully franked) with a record date of 15th May 2019, and payment date of 3rd July 2019. In its first half of 2019 results, WBC reported a statutory net profit of $3,173 million, down 24% as compared to the previous corresponding period. Its cash earnings increased by 22% to $3,296 million as compared to the previous corresponding period. Its cash earnings per share fell by 23% to 96 cents per share. The Board of Directors declared a dividend of $0.940 with the payment date on June 24, 2019, and record date on May 17, 2019.

At market close on May 17, 2019, the stock of Westpac Banking was trading at $25.410, down 1.702%, with a market capitalisation of ~$89.12 billion.


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