CBA
Commonwealth Bank of Australia (CBA) released its 1H09 reports yesterday. The bank posted a 16 per cent drop in first-half profit as bad corporate debts linked to the global financial crisis hit the bottom line. Bad debts soared nearly five-fold to more $1.5-billion. As flagged in Commonwealth's surprise profit upgrade earlier this month, the bank's operating performance was sound, highlighted by a 20 per cent increase in banking income due to fee rises and volume and market share gains.
Commonwealth Bank of Australia (CBA) has announced that it will earn $2 billion profit in the first half of 2009. The company said that it would outperform market expectations by as much as 20 per cent with interim cash profit as large as $2 billion. The ASX requires listed companies to make public any information which substantially differs from consensus earnings estimates. CBA's announcement comes ahead of its interim results which are scheduled for February 11th.
Commonwealth Bank (CBA), the largest bank in Australia, defends its highly ranked executives in breach of disclosure rules during the issue of $2 billion capital raising. CBA disagreed by saying that, rules were not broken when it warned a small group of shareholders regarding the bad debt raise before a public announcement. The bank said that the information was not materially significant so there was no need to warn the public earlier.
Australia’s third largest banking corporation, Westpac (WBC) has decided to raise its capital by A$2.5 billion through a share sale on Tuesday, to strengthen its balance sheet due to the acquisition of St George Bank (SGB), which does not have a sound lending books and raise in bad debt charges. This move follows a capital raising by National Australia Bank (NAB) last month.
Here is an update on the Australian Wealth Management (AUW) provided by Australian market analyst UBS.
Australian Wealth Management (AUW) Markets impact Q108 FUM, Q2 looking flat
Retail FUM down 9% in the quarter:
The Australian Banks underperformed the market by 0.7%.The Macquarie Research Equities (MRE) highlights about the Australian Banking Sector Impacts.
Which Banks to Support?
The Australian Banks underperformed the market by 0.7% last week, yet still trade well below their November 2007 highs. Macquarie Research Equities (MRE) highlight their sector picks as WBC and CBA given stronger balance sheets, low risk loan portfolio’s and lower exposure to offshore earnings. MRE assess the week in passing and reaffirm their sector guidance…
Australian Banking Sector reporting season preview from Australian market analyst UBS.
Start scooping up banks. Mild overweight.
Recent price falls provide a buying opportunity:
The Aussie banks have seen a sharp pull back in recent weeks following their global peers. We believe that this has been driven by: (1) concerns for the health of the US investment banks into their reporting season; and (2) overhang from the current global bank rights issues. As a result the Australian banks have now underperformed the All Resources by 46% over the last year.
Commonwealth Bank (CBA) has a share price target of $50.00 from Australian stockmarket analyst Macquarie Research Equities.
Commonwealth Bank (CBA) Upgrade to Buy
Upgraded to Buy following significant underperformance YTD:
Year to date CBA has fallen 26%, underperforming the market by 15% and the banking sector by 6%. CBA is now trading at 11.2x FY09E PE, 1.3 standard deviations below its LT average of 13x. We see this as a good opportunity to begin accumulating CBA.
Risk from "bad boys" decreasing:
MRE aggressively downgraded Australian banking sector earnings in April this year following the March half-year reporting season.
Which Bank?
Here is an Australian banking sector update from Australian market analyst UBS.
Labor Govt keeps the Four Pillars Policy
Rudd Government is committed to the four pillars policy:
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Top 150 Public Companies Listed on the Australian Stockmarket as at 29/05/2009
- BHP Billiton
- Westpac Banking Corporation (WBC)
- Commonwealth Bank of Australia (CBA)
- National Australia Bank (NAB)
- Telstra (TLS)
- ANZ
- News Corporation (NWS)
- Woolworths Limited(WOW)
- Woodside Petroleum Limited (WPL)
- Rio Tinto
- Westfield Group (WDC)
- Westfarmers Limited (WES)
- QBE Insurance
- CSL
- Newcrest Mining Limited (NCM)
- Origin Energy Limited (ORG)
- Santos Limited (STO)
- AMP Limited (AMP)
- Macquarie Group (MQG)
- Foster’s Group Limited (FGL)
