Analysts think Commonwealth Bank is going to pay a bumper second-half dividend when it reveals full-year results in August.
“CBA’s peers have all lifted their payout ratios in recent periods, which we believe will prompt CBA to follow suit,” Deutsche Bank analyst James Freeman said in a note reported by the AFR.
CBA is predicted to reveal a profit somewhere in the range of $7.6 billion. Freeman is predicting it will pay a half-year dividend of $2 per share. That would take the full-year pay-out rate to $3.64.
Goldman Sachs analyst Andrew Lyons is predicting it will be even bigger at $2.12, and that the bank could still pay a sizeable divided despite an increase in bad debt charges.
“We estimate CBA’s bad debt charge could be nearly one-third higher than our current forecast over the next five years and yet still maintain our dividend per share forecasts,” he said, according to the Australian Financial Review.
CBA paid a first-half dividend of $1.64. Traditionally it gives shareholders a bigger payment in the second half.
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