Commonwealth Bank might prefer to focus on mortgage repricing and revenue growth when it releases its first-half results this week, but most people are going to want to talk about the royal commission instead.
Australia’s biggest bank already said revenue ticked higher in the first quarter and it should show the benefit of last year’s out-of-cycle mortgage repricing when it announces its first-half results on Wednesday.
But analyst focus when it comes to outlook is likely to be on the bank’s response to the royal commission, the final findings of which were handed down on Monday.
CBA could come under pressure to offer details about future remediation costs for past misdeeds and other issues raised by Commissioner Kenneth Hayne.
‘CBA is likely to face questions on responsible lending, mortgage broker commissions, remuneration structures, further remediation costs, regulatory and compliance technology spend, and the economic impact of the credit squeeze,’ UBS analysts wrote.
‘NZ Capital will also be of focus given the RBNZ’s proposed higher capital requirements.’
Commonwealth Bank’s first-quarter unaudited cash profit unveiled in November fell 5.7 per cent to $2.5 billion, with higher funding costs and competition for borrowers putting pressure on margins.
UBS analysts expect cash profit for the six months to December 31 to be flat at $4.87 billion, with an unchanged interim dividend of $2.00.
But CBA investors have already had some good news.
CBA shares gained 4.5 per cent on Tuesday after the release of Commissioner Hayne’s report.