Multiple media sources including the News Corp press are this morning reporting the the Commonwealth Bank of Australia's (ASX: CBA) new chief executive is formulating a plan likely to significantly lift the bank's profits and potentially dividends to investors.
According to the news reports the CEO wants to cut around 10,000 jobs from the bank in a move that could lead to cost savings of $2 billion. That's a significant amount compared to a half-year profit of $4.6 billion for the six-month period ending December 31 2018, although the news is of course bad for up to 1 in 4 staff CBA staff who could potentially be out of job.
If the news reports are accurate the CEO is likely to blame the fallout from the Royal Commission and its impact on the bank for the decision, as laying off 10,000 workers is not going to be a politically popular move.
It also goes to show just how sacred CBA's dividends are, they totalled $4.31 per share last year and the bank's determination to protect them is due in part to pressure from institutional shareholders.
In response to the rumours the CBA share price is up 1.9% to $71.60 this morning, with other banks like Westpac Banking Corp (ASX: WBC) and National Australia Bank Ltd (ASX: NAB) also catching an updraft on the news.
