Commonwealth Bank of Australia (ASX: CBA) shares will be in focus next week when the banking giant releases its half-year results.
As a reminder, this time last year, Australia's largest bank released its results and reported record operating income of $13,593 million and record cash net profits of $5,153 million.
This was driven largely by volume growth in core products and a recovery in its net interest margin.
Since the release of this result, interest rates have risen further, potentially giving bank margins a nice boost.
So, could this lead to CBA reporting record profits again next week? Let's find out.
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Will CBA deliver another record result?
The short answer is, probably not.
The market is expecting CBA to post a small decline in profits for the first half of FY 2024, before realising a larger decline on a full-year basis.
For example, the consensus estimate for the first half is a cash profit of $4,972 million.
Goldman Sachs is a little more positive and has pencilled in $5,070 million. Close but no cigar. After which, the broker is forecasting cash earnings of $9,615 million for FY 2024, which represents a 4.5% decline year on year.
This is expected to be driven by a falling net interest margin (NIM), with the broker forecasting a decline to 1.98% (from 2.07%) in FY 2024. It then expects the trend to continue in FY 2025, with a NIM of 1.91% dragging its cash profits to $9,113 million.
Overall, Goldman appears to believe we have seen peak earnings for CBA.
But it is worth remembering that Australia's largest bank does have a habit of outperforming expectations. So, while a record result next week is unlikely, you can't rule it out completely.
CBA shares are up 11% over the last six months.
