Commonwealth Bank of Australia

CBA: XASX (AUS)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	A$68.00	Jdlc	Jqpdmrbrz

Commonwealth Bank Posts Another Good Quarter but Remains Overvalued

Nathan Zaia

May 12, 2021

Commonwealth Bank’s third-quarter 2021 cash NPAT of AUD 2.4 billion increased 24% on the first-half fiscal 2021 quarterly average with growth driven by a loan impairment reversal. We estimate earnings before loan impairments were flat. A 2% increase in revenue was offset by cost growth, but we expect growing loan balances to translate into better earnings in the near term. Longer-term, Commonwealth Bank’s growing market share leaves it best placed as cash rates likely rise and the bank reprices loans.

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