Commonwealth Bank (ASX:CBA) - CEO, Matt Comyn
CEO, Matt Comyn
Source: Commonwealth Bank
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  • Commonwealth Bank of Australia (CBA) reports its annual profit for the year to June 30 jumped by 19.8 per cent from the year earlier
  • CBA says its $8.65 billion net profit after tax has been driven by a sustained economic recovery from the coronavirus pandemic
  • The bank will pay a final dividend of $2 per share, up from $1.50 a share interim payment in the first half of the year
  • It has also announced an off-market share buyback of up to $6 billion
  • CBA was trading in the grey at $106.56 at 10:14 am AEST

The Commonwealth Bank of Australia (CBA) has announced a record $6 billion share buyback that beat analysts’ estimates after an economic rebound from the pandemic pushed its annual cash profit up almost 20 per cent.

CBA said cash net profit after tax rose 19.8 per cent to A$8.65 billion in the year ended June 30, beating a consensus estimate of A$8.55 billion from five analysts.

It declared a final dividend of A$2.00 per share, up from a $1.50 a share interim payment in the first half and more than double the 98 cents paid last year.

The payout ratio is equivalent to 71 per cent of CBA’s cash earnings and the bank said it would continue to target a full-year payout ratio of 70-80 per cent of cash profit.

CBA said it had considered the resilience of the domestic economy as well as its capacity to absorb potential stress events following the repurchase, which will reduce its issued share capital by more than 3.5 per cent.

Chief Executive Matt Comyn acknowledged the strength of Australia’s economic recovery over fiscal 2021, but said the pandemic continued to impact the economy and that lower interest rates would pressure the bank’s future earnings.

“The ongoing roll-out of the vaccination program and government support packages will be important to help Australians and the economy on the path back towards full economic activity,” Mr Comyn said.

Rivals Australia and New Zealand Banking Group (ANZ) and National Australia Bank (NAB) last month announced plans to repurchase shares worth a combined $4 billion.

CBA’s loan impairment expense fell to $554 million from $2.52 billion last year.

CBA by the numbers
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