February 12, 2025

 

(CBA DELIVERED A GREAT FIRST HALF PROFIT, BUT THE CEO WARNS OF STORMS ON THE HORIZON)

February 12, 2025

 

Hello everyone

 

The numbers are in for Commonwealth Bank of Australia (CBA), and they are excellent.

The bank announced better than expected first-half profits, as the bank continues to cash in on Australia’s robust housing market.

CBA’s cash net profit after tax was $5.13bn for the six months ended December 31, compared with $5.02bn a year earlier, beating market expectations of $5.06bn.

The bank has consistently illustrated disciplined operational and strategic execution, which has underpinned their performance.  Good customer relationships have seen the bank diligently respond to the needs and risks of the bank’s customer base, which has facilitated the delivery of an above-average digital experience for the customer.

Every day, the bank lends to more than 200 businesses, helps almost 400 households buy a home, and processes more than 20 million payments.

The bank controls a quarter of the country’s mortgage market.  Despite the cost-of-living concerns, the bank indicates customers are ahead on repayments.

CBA notes that any interest rate cut “should provide some relief to many households and improve business confidence.”

Home loans grew by 3 percent and business loans by 8 percent, driving operating income up 3.3 percent to $14.1bn for the six months to December 31.

CBA announced an interim dividend of $2.25 a share for its shareholders, which is five per cent higher than the interim payout last year and represents 73 per cent of cash profit.

Great profits, but the bank is cautious about the future economic landscape.

Matt Comyn, CBA’s CEO, warns that economic conditions “remain fragile”.  He notes that “private sector growth is weak, immigration is starting to slow and geopolitical uncertainties remain.”

After a conversation between Australia’s prime minister, Anthony Albanese, and Donald Trump a couple of days ago, it became clear that the two leaders agreed “on wording” in relation to US tariffs on steel and aluminium.  In other words, Donald Trump had agreed to “consider” an exemption for Australia from US tariffs on steel and aluminium.  But, in the world we live in today, words don’t seem to mean a lot, so let’s see if Mr Trump does indeed truly “consider” an exemption for Australia.

PORTFOLIO UPDATE

SELL THESE STOCKS

1/ Turning Point Brands (TPB)

Purchase Price: $56.45

Sale Price:  $67.70

Purchase Date:  01/23/25

Profit/Loss = $ 11.25 or 19.92%

2/ Powell Industries (POWL)

Purchase Price:  $290.80

Sale Price:  $210.25

Purchase Date: 01/27/25

Profit/Loss = -$80.55 or -27.69%

3/ Palantir (PLTR) (last week, I did mention that it would be wise to take some profits)

Purchase Price:  $23.00

Sale Price:  $112.62

Purchase Date:  03/20/24

Profit/loss = $89.62 or 389.65%

4/ Tesla (TSLA)

Purchase Price: $260.00

Sale Price:  $328.50

Purchase Date:  09/27/24

Profit/Loss = $68.50 or 26.34%

5/ Core Scientific (CORS)

Purchase Price:  $9.71

Sale Price:  $12.26

Purchase Date: 08/07/24

Profit/Loss= $2.55 or 26.26%

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QI CORNER

 

 

Cheers

Jacquie