Commonwealth Bank Shares Slide Amid Job Cuts and Economic Caution, but Outperform Rivals

2 min read | November 13, 2024 01:25 PM AEDT | By Team Kalkine Media

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Commonwealth Bank Shares Slide Amid Job Cuts and Economic Caution, but Outperform Rivals — Image source: Shutterstock

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CBA Share Price Decline: Commonwealth Bank of Australia shares are down 1.4% in early trade, underperforming other major Aussie banks.

Q1 FY 2025 Results: CBA reports a 3.5% increase in operating income for the quarter, with a flat cash net profit of AU$2.5 billion.

Caution on Inflation and Global Risks: CEO Matt Comyn warns of slow inflation reduction and ongoing geopolitical uncertainties.

Job Cuts: CBA is cutting 105 technology roles after a previous reduction of 116 positions in September.

Shares of Commonwealth Bank of Australia (ASX:CBA) have fallen 1.4% in early trading, closing at AU$148.14 after a slight dip from the previous day's close of AU$150.25. Despite the overall decline in the banking sector, with peers National Australia Bank (ASX:NAB) and Westpac (ASX:WBC) also seeing losses, CBA is holding up better following the release of its Q1 FY 2025 results.

CBA's operating income rose 3.5% year on year, but its cash net profit remained flat at approximately AU$2.5 billion. The bank's Common Equity Tier 1 (CET1) ratio improved by 0.29% to 11.8%, demonstrating its strong capital position before paying out AU$4.2 billion in dividends for the second half of 2024.

CEO Matt Comyn remained cautious about the economic outlook, noting that while inflation is moderating, the pace is slowing, and global geopolitical tensions are adding uncertainty. He expressed optimism about Australia's economic resilience despite slow growth.

In addition to the earnings update, CBA also announced a reduction of 105 technology roles, following a previous cut of 116 positions in September. These job cuts are part of CBA's ongoing restructuring efforts, affecting various tech and operational segments within the bank. This could have longer-term implications for the bank’s operational efficiency and workforce.

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