Commonwealth Bank of Australia (ASX: CBA) has vowed to become 100 percent renewable by the year 2030, as part of a push towards embracing a low-carbon future and for this purpose it has signed a 12-year power purchase agreement with the 270-megawatt Sapphire wind farm to reach its renewable target by 2019. CBA will further use the Sapphire wind farm to reach its 100 percent target by 2030. The Sapphire wind farm is developed by CWP Renewables and the Partners Group and recently the CWP’s CEO Mr. Alex Hewitt announced that the wind farm is going add more than 800k gigawatt hours of clean energy into the national grid by the end of 2018.
This decision by bank is not only fulfilling the Banks’s corporate and social responsibility but it is making sense from the financial point of view as going green will help the bank to save money. According to the Sustainability expert Mr. Jon Dee reducing emissions is also about reducing electricity bills, saying a well-negotiated Power purchasing Agreement (PPA) can save between 15% to 47% on a typical electricity bill. He further added that CBA is going to save money compared to the conventional energy it has been buying and soon other Australian companies will follow CBA.
According to the CBA’s general manager of corporate responsibility Ms. Kylie Macfarlane, CBA is very much happy to step up to fill the void from government’s lack of action on climate change and the bank has make sure that it is in line with the Paris agreement. It is expected that after other Australian companies would follow CBA's lead as more than 154 companies worldwide have signed up to RE100 which is a commitment by the companies to go 100% renewable.
In the First quarter of FY 2019, CBA reported an unaudited statutory net profit of $2.45bn and unaudited cash net profit of $2.50bn. The operating income in Q1 FY 2019 only increased by 1% as compared to the June quarter. The operating expenses ex one-off items in the Q1 FY 2019 decreased by 1% due to timing of investment spend and software impairments in the comparative period. CBA maintained a strong balance sheet in the September quarter with customer deposit funding at 68 percent, Net Stable Funding Ratio (NSFR) at 113 percent, Liquidity Coverage Ratio (LCR) at 133percent and the Common Equity Tier 1 (APRA) ratio at 10.0 percent. In the September quarter alone, the bank issued $8.8 billion of long-term funding. The Bank’s Leverage Ratio remained relatively stable across the quarter at 5.5 percent on an APRA basis and 6.2 percent on an internationally comparable basis.
In the last three month the share price of the bank decreased by 5.39 percent as on 13 November 2018, traded at a PE ratio of 13.270x. CBA’s shares traded at $69.210 with a market capitalization of $125.51 billion as on 14 November 2018 (AEST 4:00 PM).
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