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On 28 December 2019, Commonwealth Bank of Australia (ASX: CBA), one of the most popular banks with wealthiest base , announced that it has become the substantial holder of Aventus Group effective 27 February 2019, where it is now holding a total 26,562,231 (earlier 21,434, 752) number of fully paid stapled securities with a total voting power of 5%.
Today, it has also announced that it has ceased to become a substantial holder of Charter Hall Group with effect from 26 February 2019, where it has returned 745,498 stapled securities to Barclays Capital Securities Ltd as per the Global Master Securities Lending Agreement.
On 27 February 2019, the company notified about the change in the interest of the substantial shareholding where Commonwealth Bank of Australia earlier held 43,396,107 securities of Aurelia Metals Limited with the voting power of 5%. Now, it has increased its voting power to 6.09%, and the company is now holding 52,859,921 securities of Aurelia Metals Limited, effective 26 February 2019.
Recently, CBA had published its half-year results for the period ended 31 December 2018, and the company made a statutory net profit after tax (NPAT) of $4,599 million from its discontinued operations. From the continued operations, the NPAT during the period was up by 1.7% to $4,676 million. The net operating income declined by 1.9% to $12,408 million which got balanced by lower net interest margin, lower Markets and fee income, as well as the impact of weather events. The net margin during the period was 2.10%, the four basis points were below the second half of FY2018 which was driven by higher funding costs and home loan switching and competition. There was a decrease in the operating expenses by 3.1% and stood at $5,289 million. The loan impairment expense during the period was $577 million. The effective tax rate during the period was 28.5% and is expected to reach approximately 29% for FY2019. The period reported an increase in the Earnings per share by 0.9 cents per share to 265.2 cents. The return on equity (cash) declined by 40 basis points and was recorded at 13.8%. The company declared an interim dividend of $2.00 per share.
CBA during the period was able to maintain strong funding, liquidity and capital positions. Out of the total funding, 69% of the funds were through Customer deposits. The Net Stable Funding Ratio during the period reached 112% in 1H FY2019 which was 110% in 1H FY2018 and was driven by the efficient customer deposit mix which resulted in strong growth in Retail and SME deposits. The Liquidity Coverage Ratio was 131% which was above the regulatory minimum of 100%.
Outlook:
Based on continuous growth in the GDP trend, the full employment along with the growth in the Australian economy, Matt Comyn, the CEO of CBA stated that the strengths along with the companyâs growing population, the infrastructure boom, and continued demand for its exports would be supporting the growth in income of Asia region. The company would stay focused on serving its customers' financial needs and help the economy, with the support of a resilient and robust balance sheet.
Stock performance:
In the last six months, the stock has generated a return of 3.46%. By the end of the trading session on 28 February 2019, the price of the stock was A$73.950, up by 0.407% as compared to the previous trading dayâs closing price. The company has a market capitalization of A$130.38 billion with approximately 1.77 billion outstanding shares and a PE ratio of 14.350x.
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