CBA Declares Fully Franked AUD 1.16 Dividend on PERLS XVI Notes
Commonwealth Bank of Australia announces a fully franked quarterly dividend of AUD 1.1585 per security on its PERLS XVI capital notes, scheduled for payment in March 2026.
- Dividend of AUD 1.1585 per PERLS XVI security
- Fully franked distribution at 30% corporate tax rate
- Quarterly payment period ending 15 March 2026
- Total annualised distribution rate of 4.6984%
- Payment scheduled for 16 March 2026 with no approvals required
Dividend Announcement Overview
Commonwealth Bank of Australia (CBA) has declared an ordinary dividend distribution of AUD 1.1585 per security on its PERLS XVI capital notes (ASX code – CBAPM). This dividend is fully franked, reflecting the bank’s confidence in its earnings and tax position. The distribution relates to the quarter ending 15 March 2026, with key dates set for investors to note – an ex-dividend date of 5 March 2026, a record date of 6 March 2026, and a payment date of 16 March 2026.
Details Behind the Distribution Rate
The dividend rate is calculated based on the 90-day bank bill swap rate plus a margin of 3.00%, adjusted for tax effects. Specifically, the total annualised distribution rate stands at 4.6984%, factoring in the base rate of 3.712% as of the dividend rate setting date (15 December 2025) and the applicable 30% corporate tax rate. This methodology aligns with the PERLS XVI terms and conditions, which govern the capital notes.
Implications for Investors and Market
For income-focused investors, this fully franked dividend offers an attractive yield, supported by the bank’s robust financial position. The franked nature means investors can benefit from franking credits, reducing the effective tax burden on the dividend income. Importantly, no external approvals or court orders are required for this distribution, streamlining the payment process.
Discretionary Nature of Payment
While the dividend is scheduled and expected to be paid in full, the PERLS XVI terms grant CBA discretion to withhold distributions if deemed necessary. This introduces a degree of uncertainty, although historically, the bank has maintained consistent payments on these notes. The distribution will be made via electronic transfer, ensuring timely receipt for security holders.
Looking Ahead
Investors should monitor upcoming market conditions and any announcements from CBA regarding future distributions or changes to capital instrument terms. The scheduled payment reinforces CBA’s commitment to rewarding investors while managing its capital structure prudently.
Bottom Line?
CBA’s fully franked dividend on PERLS XVI notes signals steady income for investors, but discretionary payment terms warrant close watch.
Questions in the middle?
- Will CBA maintain this distribution rate amid changing interest rates?
- How might future economic conditions affect the bank’s discretion to pay dividends?
- What impact will this dividend have on the pricing and demand for PERLS XVI notes?
