FNArena’s Weekly Insights – August 14 2023
In this week’s Weekly Insights:
August Results: Early Observations
By Rudi Filapek-Vandyck, Editor
From a general market sentiment perspective, the importance of the financial performance of CommBank ((CBA)) in Australia can never be understated. Not only is CBA the largest (premium) bank in the country, it is also the second largest constituent of the ASX200.
Last week, CommBank’s FY23 financials proved slightly more resilient than most analysts had been expecting. Management and the board at the bank showcased their operational confidence by lifting the dividend for shareholders by 14% plus announcing a $1bn share buyback on top.
In sticking with the local tradition from the past two decades or so, when things get hairy for local banks and the economy, CommBank stands ready to show the world who’s boss. Plus there’s always the knee-jerk response to make sure loyal shareholders are pampered. CommBank’s blueprint was also followed by minnow Bendigo and Adelaide Bank ((BEN)) on Monday (dividend up by 15%).
While questions remain about what exactly to expect from the year ahead given rate hikes impact at a significant delay and all that, CommBank’s FY23 performance has injected enough confidence for most sector analysts to now project ongoing dividend increases for the years ahead.
This is a notable improvement from the weeks and months preceding this year’s August results season when just about every analyst had penciled in one more rise for the dividend, followed by one year, maybe two years, of no further increases.
While the overall mood change post FY23 release is undoubtedly a positive…………..
