Commonwealth Bank of Australia (CBA) delivered a cash profit of $10.25 billion and a $4.85 annual dividend for FY25, but analysts remain overwhelmingly bearish with the stock trading at over 30 times earnings compared to Big Four peers at 14-17 times.
The 4% profit increase exceeded analyst expectations, supported by robust operational metrics across Australia's largest lender.
The bank declared a final dividend of $2.60 per share, bringing total 2025 financial year (FY25) payouts to $4.85 - up 4% year-on-year.
Net interest margins held steady at 2.08%, despite competitive deposit pricing pressures.
Pre-provision profit rose 3% to $15.47 billion, while return on equity maintained market-leading levels at 13.5%.
Credit quality strengthened significantly, with loan impairment expenses declining 9% to $726 million.
Home loan arrears stabilised, with 85% of mortgage customers remaining ahead of scheduled repayments.
“Despite global uncertainty, the Australian economy has remained resilient, with strong fundamentals including a healthy labour market, steady immigration and ongoing public sector investment,” CBA Chief Executive Matt Comyn said.
“Even though sentiment remains subdued, we expect economic growth to improve modestly as the year progresses.”
Yet for all the strong fundamentals, valuation concerns dominate analyst sentiment.
Professional investors have issued 10 strong sell recommendations against just one hold rating amongst major brokers.
Analysts maintain an average price target of $119.13, implying significant downside from current levels above $170.
CBA (ASX: CBA) shares closed up 0.82% at $178.05 on the Australian Securities Exchange yesterday.
This article does not constitute financial or product advice. You should consider independent advice before making financial decisions.