The Commonwealth Bank has slashed final dividend for the 2019-20 financial year by more than 50% in the wake of the impact of COVID-19 pandemic and lockdowns.
The country’s biggest bank said it would pay a final of 98 cents a share, 57% down from the $2.31 paid in the previous two years.
With the unchanged interim of $2 a share, the CBA’s total payout for 2019-20 will be $2.98, down nearly 31% from the $4.31 paid the year before.
The total payout and final are still a bit higher than the market had been expecting.
That news should help lift CBA shares on Wednesday (they closed at $74.70 on Tuesday), despite a massive sell-off in gold on Wall Street overnight.
CBA shares have risen more than 35% from the March low of less than $55, as markets have taken the view Australia’s recession will not be as deep as feared. CBA shares are still well under the February high of $901.05
The slash to the dividend follows an 11.3% slide in cash earnings to $7.296 billion (still an awful lot of money) from $8.221 billion in 2018-19.
Revenue rose 0.8% to $23.758 billion for the year to June.
Net interest margin for the year eased 2 points to $2.07, despite the Reserve Bank slashing the cash rate to a record low of 0.25% and targeting that rate for the next few years to give funding certainty to banks and customers.
Chief executive Matt Comyn said in Wednesday’s release: “While there is continued uncertainty about the duration and impact of the health crisis, Australia is relatively well-positioned. We are starting from a position of fiscal and economic strength.”