Commonwealth Bank of Australia (ASX: CBA) shares are bouncing around on Wednesday.
In early trade, the banking giant's shares were down almost 1.5% to $168.96.
However, they are now up almost 1% to $172.40.
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What's going on with CBA shares?
There are a couple of reasons why the shares of Australia's largest bank are being volatile today.
Investors were initially selling CBA shares today after they traded ex-dividend for its final dividend of FY 2025. When a share goes ex-dividend, it means the rights to that payout are now locked in.
As a result, any investors buying the bank's shares today, will not be entitled to receive the dividend when it is paid. It will instead be paid to the seller of the shares, even though they won't own them when pay day comes around.
And as a dividend forms part of a company's valuation, it will tend to drop in line with the value of the payout to reflect this. After all, prospective shareholders don't want to pay for something that they won't receive.
However, this has been offset by a strong showing for bank stocks on Wednesday, which has seen the rest of the big four charge notably higher.
At the time of writing, ANZ Group Holdings Ltd (ASX: ANZ) shares are up 2.5%, National Australia Bank Ltd (ASX: NAB) shares are up over 3%, and Westpac Banking Corp (ASX: WBC) shares are up 2.5%.
The CBA dividend
Last week, CBA released its full year results and reported a 7% increase in statutory net profit after tax to $10,133 million and a 4% lift in cash net profit after tax to $10,252 million.
This was driven by lending volume growth in its core businesses, a stable underlying net interest margin, and a lower loan impairment expense, which was partly offset by higher operating expenses due to inflation and accelerated investment.
This led to the CBA board declaring a fully franked final dividend of $2.60 per share, which meant an increase in its full year dividend of 4% to $4.85 per share.
It is this final dividend of $2.60 per share that CBA's shares are going ex-dividend for this morning.
When is pay day?
Eligible shareholders can now look forward to receiving this payout at the end of next month on 29 September.
After which, analysts at Macquarie Group Ltd (ASX: MQG) are forecasting fully franked dividends per share of $4.92 in FY 2026, $4.96 in FY 2027, and then $5.00 in FY 2028.
