ASX 200 bank shares to follow suit after CBA dividend hike: expert

Dividend investors rejoice! This expert expects more dividends to come from ASX 200 bank shares…

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The Commonwealth Bank of Australia (ASX: CBA) share price lifted to another record following its full-year results on Wednesday.

Part of the excitement stemmed from Australia’s biggest bank increasing its full-year dividend by 17% compared to the previous year. An investing expert expects similar cash splashes from other banks in the ASX 200.

Speaking of the benchmark, the S&P/ASX 200 Index (ASX: XJO) has also been ascending to new heights in the past week. On Wednesday, the Aussie index cemented a record level of 7,614.2 points. The continued strength in the CBA share price has certainly helped to achieve this.

Money shower for bank investors

Earlier in the week, CBA announced its FY21 results which came along with an extra big dividend payday. The bank had plenty of excess capital to reward shareholders, with net profits burgeoning to $8,843 million.

Indeed, shareholders are not complaining after CBA revealed a 17% increase in its dividend. This takes the full-year payment to $3.50 per share. In addition to the dividend splurge, investors will be treated to a $6 billion off-market share buy-back.

Over the past year, the ASX-listed bank share has been flushed with cash. This was the result of monetary policies and government stimulus propping the economy up throughout the COVID-19 pandemic. As a result, strong growth across business lending, home lending, and household deposits occurred.

Portfolio Manager of Ausbil Active Dividend Income Fund, Michael Price, suggested investors can expect to see others follow CBA.

We have been expecting a big dividend from CBA – and we expect similar announcements from the other majors, and have been positioned accordingly.

According to Ausbil’s June fact sheet for the income fund, the fund manager’s top holding is CBA. Furthermore, Ausbil is overweight on bank shares including CBA, National Australia Bank Ltd (ASX: NAB), Westpac Bank Corp (ASX: WBC), and Macquarie Group Ltd (ASX: MQG).

We see a multi-year growth path for bank dividends as they unwind the excess COVID capital they are holding, and as the economy grows.

Michael Price, Ausbil

When are ASX 200 bank shares reporting?

Well, as you would know by the end of this article CBA has already released its full-year results. At the time of writing, there are still some notable ASX 200 bank shares left to release their financials this reporting season.

Monday (16 August) will see Bendigo and Adelaide Ltd (ASX: BEN) dish out its full-year result to investors. Following that, Westpac Banking Corp (ASX: WBC) will report the next day, and ANZ on 18 August. A complete list of ASX companies reporting, including the ASX 200 bank shares, can be found on our ASX reporting season calendar.

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Motley Fool contributor Mitchell Lawler owns shares of Commonwealth Bank of Australia and Macquarie Group Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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