The Commonwealth Bank of Australia (ASX: CBA) share price is sliding in morning trade.
CBA shares closed yesterday trading for $101.28 and are currently trading for $100.41, down 0.9%.
This comes after the S&P/ASX 200 Index (ASX: XJO) listed bank, Australia's largest, released its full-year results for the 12 months ending 30 June this morning (FY22).
Among the highlights reported by The Motley Fool earlier today…
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What did CommBank report?
The CBA share price is in the red in early trade despite reporting some strong results.
Those included a 3% year-on-year increase in revenue, which reached $25.14 billion in FY22.
Cash earnings of $9.60 billion were up 11% from FY21.
The big bank managed to increase its revenue and cash earnings while trimming its operating expenses, which were down 1.5% year on year to $11.19 billion.
On the negative side of the ledger, net interest margins (NIM) dropped 0.18% from FY21 to 1.9%. The bank pointed to lower margins on its home loans along with a spike in lower-yielding liquid assets for the decline.
With the Reserve Bank of Australia on a rate-hiking path, however, CBA forecast its NIM would improve.
CommBank also declared a final fully-franked dividend of $2.10 per share. For the full year, it's paying a dividend of $3.85 per share. That's a trailing yield of 3.8% at the current CBA share price.
Yet none of the past year's results, nor the healthy dividend look to be enough to boost the bank's shares today.
Why is the CBA share price sliding today?
The CBA share price is the only one of the ASX 200 banks in the red today.
Macquarie Capital analyst Victor German pointed to the continuing price-to-earnings (P/E) ratio premium that CommBank demands over its peers as likely to throw up headwinds for the bank.
At the current share price, CBA trades at a P/E ratio of 19 times.
"While we recognise the appeal of the franchise in the rising rate environment, the current multiple is difficult to justify, in our view," he said (courtesy of The Australian). "With pre-provision profit broadly flat in 2H22, we see CBA's premium as too demanding."
German said the decline in NIM was "arguably the key area of disappointment".
German continued:
While most of the margin decline came through in the third quarter, it appears that June quarter margins were broadly flat versus peers being slightly up. Elsewhere, marginally better expense management resulted in a small pre-provision beat, however, we note that CBA wrote off about $445 million of capitalised expenses, which continues to support its expense performance.
CBA share price snapshot
While it hasn't exactly shot out the lights, the CBA share price has outperformed the benchmark this year, down 2% in 2022 compared to a year-to-date loss of 8% posted by the ASX 200.
