Commonwealth Bank of Australia, Still Holds a Silver Lining for Dividend Investors
Following the recent correction in CBA’s valuation, the bank is starting to look like a compelling opportunity with its stable financials and steady outlook.
Commonwealth Bank of Australia (ASX: CBA)
had a good start to FY26 as the bank kept its focus on customer support, a strong balance sheet and its long-term investment plans.
The unaudited cash NPAT for the September quarter was $2.6 billion which grew by 1% from the 2H25 quarterly average and is about 2% higher than same period last year.
Total operating income was up 3%, helped by lending growth, more household deposits and higher fee volumes.
Net interest income also went up by 3% but net interest margin narrowed a bit because of the jump in lower-yielding liquid assets and institutional repo balances.
The bank added over 175,000 new retail transaction accounts in the quarter and saw healthy deposit growth of $17.8 billion, at 1.2x system growth while home lending grew by $9.3 billion.
Business banking also did better as business transaction accounts were up 7% year-on-year and lending supported by demand across different sectors.
The company has raised $16 billion in long-term wholesale funding so far.
Operating expenses increased 4% because of wage inflation, tech vendor costs and loan impairment expense stayed low at $220 million, helped by stable credit quality, lower consumer arrears and a cautious provisioning approach.
CBA’s balance sheet stayed strong with a 79% deposit-funding ratio, a Liquidity Coverage Ratio of 133% and a net stable Funding Ratio of 116%, which are all way above the required levels.
The company paid $4.4 billion in dividends during the quarter, directly benefiting over 800,000 shareholders and purchased more than $640 million shares in the quarter to satisfy the 2H25 Dividend Reinvestment Plan.
To sum it up, CBA’s first quarter delivered steady earnings while maintaining stable credit quality which leaves the bank well placed to continue creating long-term value for shareholders.
(Source: Company Reports)
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