CBA Reports 4% Cash NPAT Growth and $4.85 Dividend in FY25

• 4% increase in cash NPAT to $10.25 billion
• Dividend per share raised by 20 cents to $4.85
• Strong growth in home and business lending
• Over $900 million invested in fraud and cyber protection
• Significant technology and AI investments driving customer experience

Robust Financial Performance Amidst Economic Recovery

Commonwealth Bank of Australia (CBA) has delivered a solid FY25 financial performance, with cash net profit after tax (NPAT) rising 4% to $10.25 billion. This growth was supported by a disciplined approach to volume and margin management, alongside a 5% increase in operating income and a modest rise in operating expenses driven by inflation and technology investments.

The bank’s capital position remains strong, with a Common Equity Tier 1 (CET1) ratio of 12.3%, comfortably above regulatory minimums. This robust capital base underpins CBA’s ability to support franchise growth and sustain shareholder returns, including an 20 cent increase in dividend per share to $4.85.

Lending Growth and Market Leadership

CBA continued to expand its lending footprint, helping over 140,000 households purchase homes and growing business lending by 1.3 times the system rate. The bank maintained leading market shares in retail and business banking, with retail main financial institution (MFI) share at 33.4% and business MFI share at 27.3%. Proprietary home lending flow remained strong at 66%, accounting for approximately 52% of the market share.

Despite competitive pressures, CBA’s disciplined volume and margin strategy enabled it to gain 7 basis points of home loan market share and increase its share of net interest income. The bank also lent $42 billion to businesses, supporting economic growth and employment.

Technology and AI, The Cornerstones of Customer Experience

FY25 saw CBA accelerate its investment in technology and artificial intelligence, with over $900 million spent on protecting customers from fraud, scams, and cyber threats. The bank leveraged AI to send up to 35,000 suspicious transaction alerts daily, a tenfold increase from the previous year, and used its NameCheck system over 110 million times to prevent mistaken and scam payments exceeding $880 million.

Strategic initiatives included the launch of the AI Factory and Seattle Tech Hub to fast-track generative AI adoption, alongside partnerships with OpenAI and Anthropic. These efforts have enhanced digital experiences, with the CommBank app now boasting over 9 million active users and daily logins exceeding 12.7 million. The relaunch of CommBank Yello and the digital transformation of Bankwest further exemplify CBA’s commitment to delivering simpler, safer, and more rewarding banking.

Supporting Customers and Communities

Amid ongoing cost-of-living pressures, CBA provided more than 139,000 tailored payment arrangements to customers in need and extended its commitment to regional branches until at least July 2027. The bank also paid over $22 billion in interest to Australian savers and returned $8 billion to shareholders through dividends and share buy-backs, benefiting more than 13 million Australians.

These efforts reflect CBA’s broader purpose to build Australia’s future economy, support customers through challenging times, and maintain a strong, stable financial system.

Navigating Regulatory and Economic Challenges

CBA addressed upcoming regulatory changes, including APRA’s revised capital framework and the removal of Additional Tier 1 capital from prudential requirements starting in 2027. The bank is well positioned to meet these standards, with a total capital ratio of 20.9% and a strong Tier 2 credit rating.

Credit quality remains resilient, though the bank noted some deterioration in the Victorian home loan portfolio, consistent with broader economic conditions. Provisions remain prudent, supported by forward-looking adjustments and scenario analysis amid global uncertainties.

Looking ahead, CBA’s strategic focus on technology, disciplined capital management, and customer-centric initiatives aim to sustain its market leadership and deliver long-term value.

Bottom Line?

CBA’s FY25 results underscore a confident pivot to AI-driven banking, but investors will watch closely how regulatory shifts and economic headwinds shape its next chapter.

Questions in the middle?

• How will APRA’s upcoming capital reforms impact CBA’s capital strategy and dividend policy?
• What risks does the deterioration in Victoria’s home loan portfolio pose for future credit losses?
• How quickly can CBA scale its AI initiatives to maintain competitive advantage in digital banking?