It hasn't been a fun month for bank shareholders in March. The banking crisis has weighed heavily on sentiment and dragged ASX 200 bank shares lower.
But Commonwealth Bank of Australia (ASX: CBA) shareholders have a reason to smile on Thursday.
That's because today is payday for Australia's largest bank's interim dividend.
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The CBA dividend
Last month, CBA released its half year results and reported a 12% increase in operating income to $13,593 million. Management advised that this was driven largely by volume growth in core products and a recovery in its net interest margin.
CBA's net interest margin increased 18 basis points year over year to 2.10%. This reflects higher earnings on deposits, replicated products, and equity hedges in a rising rate environment, partly offset by increased competition.
On the bottom line, CBA's cash net profit after tax came in 9% higher year over year at $5,153 million. This was driven by its strong operational performance, a rising rate environment, and higher loan loss provisioning.
This ultimately allowed the CBA board to increase its fully franked interim dividend by 20% to a record of $2.10 per share. This represents a 69% payout ratio and reflects the bank's continued capital and balance sheet strength.
Today is payday for this record CBA interim dividend, with eligible shareholders due to receive it in their nominated accounts. Unless, of course, they elected to take part in the bank's dividend reinvestment plan.
What's next?
The good news is that an even larger dividend is expected from CBA in the second half of FY 2023.
According to a note out of Goldman Sachs, its analysts are forecasting a fully franked final dividend of $2.58 per share.
This will bring the FY 2023 CBA dividend to a total of $4.68 per share, which equates to an attractive 4.9% yield.
