Commonwealth Bank of Australia announces a fully franked quarterly distribution of AUD 1.1154 per security for its PERLS XIV capital notes, payable in March 2026.
- AUD 1.1154 fully franked dividend declared for PERLS XIV capital notes
- Distribution relates to quarter ending 15 March 2026
- Payment scheduled for 16 March 2026 with ex-date 5 March 2026
- Dividend rate based on 3-month bank bill swap rate plus 2.75% margin
- No approvals required prior to payment; distribution expected in full
Dividend Announcement Overview
The Commonwealth Bank of Australia (CBA) has declared an ordinary dividend distribution of AUD 1.1154 per security for its PERLS XIV capital notes (ASX code, CBAPK). This distribution is fully franked, reflecting the bank’s confidence in its ongoing profitability and tax position. The dividend relates to the quarter ending 15 March 2026 and will be paid on 16 March 2026, with an ex-dividend date of 5 March 2026.
Understanding the Distribution Rate
The dividend rate for this period is calculated using the 90-day bank bill swap rate (BBSW) plus a margin of 2.75%, resulting in an annualised rate of 4.5234% after adjusting for the 30% corporate tax rate. This method aligns with the terms set out in the PERLS XIV capital note conditions, which tie distributions to prevailing short-term interest rates plus a fixed margin. The distribution period covers 90 days from 15 December 2025 to 14 March 2026.
No Approvals Required and Payment Details
Importantly, no external approvals such as security holder or court approvals are required before the dividend payment. The bank retains discretion under the PERLS XIV terms to withhold distributions, but this scheduled payment is expected to be made in full. Payments will be made via electronic transfer to security holders recorded as of 6 March 2026.
Implications for Investors
For investors in CBA’s PERLS XIV notes, this announcement confirms a steady income stream tied to market interest rates, with the added benefit of full franking credits enhancing after-tax returns. The fully franked nature of the dividend means investors can claim a credit for the tax already paid by the bank, which is particularly attractive for Australian resident investors. However, the discretionary nature of distributions under the capital note terms introduces a degree of uncertainty for future payments.
Looking Ahead
As the March payment date approaches, market participants will be watching closely to confirm the distribution is paid as scheduled. The dividend announcement also serves as a reminder of the sensitivity of these capital notes to interest rate movements and regulatory conditions. Investors should remain attentive to any updates from CBA regarding future distributions or changes in capital instrument terms.
Bottom Line?
CBA’s fully franked dividend for PERLS XIV notes signals steady income but leaves room for future discretion.
Questions in the middle?
- Will CBA maintain full distributions on PERLS XIV amid changing market conditions?
- How might shifts in the 90-day bank bill swap rate affect upcoming dividend rates?
- Could regulatory or economic pressures influence CBA’s discretion on future payments?