AUS
NZ
UK
CA
USA
IND
Commonwealth Bank of Australia (ASX:CBA) shares delivered impressive returns in 2023, outperforming the S&P/ASX 200 Index. The stock, which closed at $102.60 on December 30, 2022, saw a significant increase to $111.80 by the end of the 2023 trading year, marking a 9% gain for the calendar year.
This performance update places Commonwealth Bank of Australia in focus within the context of ASX financial stocks, highlighting its notable gains and positioning in the financial sector.
Adding to the attractiveness of CBA shares were the fully franked dividends. In 2023, CBA paid an interim dividend of $2.10 per share on March 30 and a final dividend of $2.40 on September 28. This brought the total 2023 payout to $4.50 per share, with potential tax benefits. Taking the dividends into account, the accumulated value of CBA shares gained 13.4% over the year.
Key factors that contributed to the rise in CBA shares in 2023:
- Profitable Financials: CBA reported a 13% year-on-year increase in operating income to $27.24 billion for the 2023 financial year. The cash net profit after tax also saw a 6% jump from FY 2022 to $10.16 billion.
- Solid Portfolio Quality: CEO Matt Comyn highlighted that the bank's portfolio quality remained sound, with arrears and impairments below long-term averages. This was supported by a strong labor market and savings and repayment buffers.
- First Quarter Update: CBA's first-quarter update in November showed operating income in line with the prior corresponding quarter at $6.82 billion. The cash net profit after tax increased by 1% to $2.5 billion.
- Financial Strength: CBA ended the year with a strong financial position, reporting a 0.46% increase in its common equity tier 1 (CET1) ratio to 11.8%. The CET1 ratio measures the core equity capital of a bank compared to its risk-weighted assets.
Looking ahead to 2024, CBA shares have started the year on a positive note. On the first trading day of 2024, the stock is up 1.3%, reaching a new 52-week high at $113.22 per share.
