Commonwealth Bank of Australia (ASX: CBA) shares ended Wednesday's session slightly lower at $172.72 following the release of the bank's FY26 results.
After reading through the result, there were several things I liked and a couple of areas I will be watching closely.
So, are CBA shares still a buy?
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What impressed me
What caught my attention was not simply the headline profit number.
CBA grew at or above the wider banking system across home lending, business lending, consumer finance, household deposits, and business deposits during FY26. According to the bank, this is the first time it has achieved that across all five areas and the first time any of the major Australian banks has done so in 15 years.
I think that says a lot about the strength of CBA's franchise.
The bank remains the main financial institution for one in three Australians and one in four Australian businesses. Its scale gives it opportunities to deepen those relationships over time rather than relying on one particular part of banking to drive growth.
Business banking continues to stand out to me. CBA grew its business lending faster than the wider market during FY26 and increased its market share. I like this because it gives the bank another growth avenue alongside its enormous home lending operation.
Shareholders are being rewarded
The dividend was another positive.
CBA declared a fully-franked final dividend of $2.70 per share, taking the FY26 payment to $5.05 per share. That was 4% higher than the previous year and represented 77% of cash profit, comfortably within management's target payout range.
For me, the dividend increase is another sign of confidence in the underlying business.
CBA also finished the year with its Common Equity Tier 1 capital ratio comfortably above the regulatory minimum, leaving the bank well placed to support customers and continue investing in the business.
What am I watching?
Housing is where I become more cautious.
CBA revealed that home loan application volumes had fallen 15% since May. The bank said housing activity has softened from a high base, although application volumes appear to have stabilised in recent weeks.
That slowdown is worth watching because mortgages remain an important part of CBA's business.
There are also signs that higher living costs and interest rates are putting more pressure on some borrowers. Home loan and personal loan arrears increased during FY26, while the bank recorded a higher loan impairment expense.
I do not think this is a reason to panic. Credit quality remains sound overall and CBA continues to carry substantial provisions against a more difficult economic outcome. But I will be watching closely to see whether the slowdown in housing and rising arrears become more pronounced during FY27.
Foolish Takeaway
My verdict on CBA shares remains a buy.
I liked the broad growth across the bank, particularly the continued strength of its business franchise, while the higher dividend gives shareholders another reason to be pleased with the result.
Housing conditions and borrower stress deserve attention over the coming year. For now, though, I think CBA continues to show why it has earned such a strong position in Australian banking.
