Commonwealth Bank CEO Matt Comyn said shareholders are set to receive more than $8 billion worth of dividends next month. (Source: Getty)
Commonwealth Bank (CBA) shareholders are in for a big payday after Australia’s biggest bank posted a record profit. CBA revealed it pulled in $10.25 billion in net profit after tax for the 2024-25 financial year, which was a 4 per cent lift on the year prior.
The bank put the huge result down to a lift in lending volume for its “core businesses”, as well as a reduction in loan impairment expenses thanks to improving economic conditions and moves from the Reserve Bank of Australia (RBA) on interest rates. CEO Matt Comyn said this record profit will flow back to shareholders.
“Our performance has allowed us to… pay $8 billion in dividends to shareholders, benefiting more than 13 million Australians,” he said.
The bank revealed the final dividend was $2.60 per share.
That means the total dividend per share for the 2024-25 financial year is $4.85, fully franked.
When a dividend is fully franked, it means the company has already paid the full amount of corporate tax on the profits from which the dividend is paid.
Shareholders then get a franking credit, which they can use to offset their own tax liability.
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Commonwealth Bank shareholders are in for a big payday after the bank posted a record profit. (Source: Getty) · WILLIAM WEST via Getty Images
CBA revealed this year’s dividend payout will constitute 79 per cent of its net profit after tax, which it said is “near the upper end” of its target range.
The bank aims to dedicate between 70 to 80 per cent of its profits to dividends.
In the 2019-20 and 2020-21 years, the payout was at 71 per cent, before dipping to 68 per cent the year after.
The 2022-23 year had a 75 per cent rate, and last year was also 79 per cent.
Despite it being the same payout percentage as 2023-24, the amount that each shareholder will receive this year is 4 per cent higher.
The final dividend will be paid out on September 29.
There are more than 800,000 direct retail shareholders of CBA stock; however, millions more are also invested in the bank through their superannuation funds.
Super funds will invest your money in some of the biggest companies in Australia and across the planet to grow your retirement fund, and CBA would likely be featured in many due to its place in the country’s banking sector and its recent performance.
Comyn said while the last few years have been tough for millions of Aussies, he believed the country was finally turning a corner.
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“This past year has brought some relief through easing inflation, lower interest rates and tax cuts,” he said.
“Many households are now experiencing a rise in disposable income, and the financial gap between younger and older Australians has narrowed.
“Savings have increased, with younger Australians now rebuilding their financial buffers, and discretionary spending has also picked up, reflecting growing consumer confidence.”
But he admitted that while interest rates are falling, there is still a risk of “unpredictable and volatile” moves from overseas that could affect our recovering economy.
Comyn said CBA will be watching global events “closely” but believes Australia is now well placed to respond to any sudden changes.
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