What to expect from the CBA (ASX:CBA) half year result next month

What is expected from CBA next month?

| More on:
CBA share price money laundering asx bank shares represented by large buidling with the word 'bank' on it

Image source: Getty Images

All eyes will be on the Commonwealth Bank of Australia (ASX: CBA) share price next month when it releases its half year results.

Ahead of the release, let’s take a look to see what the market is expecting from the banking giant on 9 February.

What is expected from CBA in the first half?

The team at Morgans is bearish on the CBA share price and has a reduce rating and $74.00 price target. In light of this, it will come as no surprise to learn that the broker is forecasting a half year result that falls short of the market’s expectations.

According to the note, the broker expects CBA to report a first half cash net profit after tax of $4.32 billion. This is 2% lower than the Visible Alpha consensus estimate of $4.406 billion and compares to $4.785 billion during the second half of FY 2021. This is being driven by its belief that CBA’s net interest margin (NIM) will be softer than the market is forecasting.

Morgans commented: “Our 1H22 NIM forecast of 186bps compares with Visible Alpha consensus of 191bps. We therefore see risk that the market will be disappointed on the NIM front.”

What else?

One item that Morgans is actually more positive on than the market is the bank’s expenses. It doesn’t expect them to increase as much as consensus estimates.

It commented: “CBA reported a 3% increase in the run-rate of operating expenses (excluding remediation costs) from 2H21 to 1Q22. We expect this increase to be 2% from 2H21 to 1H22 as a result of our expectation of greater annual leave usage in 2Q22. However, we are more optimistic than consensus on this front as consensus appears to be factoring in a 3% increase from 2H21 to 1H22.”

One final item that the broker will be looking for commentary on is the Omicron impact on its operations.

Morgans concluded: “By way of outlook for asset quality, we will be particularly interested to hear about what CBA is seeing on the SME front with the spread of Omicron.”

Food for thought for investors over the next couple of weeks before the big day.

Should you invest $1,000 in CBA right now?

Before you consider CBA, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and CBA wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Bank Shares

A young man wearing a bright yellow jumper and glasses purses his lips together and moves them to the side of his face as he wonders whether the Macquarie share price is a buy
Bank Shares

Is the CBA share price a buy following the bank’s digital mortgage launch?

Are CBA shares a buy today considering the bank's new digital platforms?

Read more »

A man in a suit smiles at the yellow piggy bank he holds in his hand.
Bank Shares

What’s moving the CBA share price higher this week?

Australia's banks are expected to reap higher profits as the RBA increases the official cash rate.

Read more »

A kid stretches up to reach the top of the ruler drawn on the wall behind.
Bank Shares

Has the ANZ dividend been growing?

The ASX bank's shares are well known for their big dividends but have tbey been growing recently? We take a…

Read more »

Young woman using computer laptop with hand on chin thinking about question, pensive expression.
Bank Shares

Why is the Westpac share price sliding lower today?

Investors will be locking in the company’s latest dividend today…

Read more »

Red percentage sign on blocks on top of each other, symbolising interest rates.
Broker Notes

3 cheap ASX shares set to boom with higher interest rates: Wilsons

Most stocks hate when rates rise. But not this trio, which are inexpensive right now and have blue skies ahead,…

Read more »

A man raises his reading glasses in a look of surprise.
Bank Shares

Could Bank of Queensland shares deliver 46% upside AND a 4.5% dividend yield in 2022?

One broker is predicting a bright future for this bank stock.

Read more »

a man with a wry smile is behind ascending piles of coins as he places another coin on top of the tallest stack.
Share Market News

Can ASX 200 banks really see a 15% profit jump if the cash rate hits 1%?

These analysts are predicting big returns for banks in the rising interest rate environment.

Read more »

A man sits in deep thought with a pen held to his lips as he ponders his computer screen with a laptop open next to him on his desk in a home office environment.
Bank Shares

Why I think NAB shares could be the smartest big four ASX bank to buy

NAB looks like a solid bank to own in my opinion.

Read more »