ASX finishes in the green as CBA rises on record profit

The lowdown

Earnings season is officially in full swing: major banks dominated the headlines on Wednesday, with both CBA and Suncorp revealing their figures for the 2023 financial year.

Commonwealth Bank shares closed 2.6 per cent higher after the lender posted its result and revealed it will lift its dividend even at a time of increased risks from the rise in the cost of living and higher interest rates.

“The Australian economy has been resilient with the tailwinds of a recovery in population growth, relatively high commodity prices and low unemployment,” CBA chief Matt Comyn said in a statement.

Comyn had a pay rise of more than $3 million, with the bank boss’s total pay rising from almost $7 million to $10.4 million in the latest financial year as he received bonus shares linked to the bank’s long-term performance.

The other big four banks also finished in the green: NAB lifted 2.2 per cent, Westpac 1.7 per cent and ANZ gained 0.8 per cent.

Market heavyweights Rio Tinto slid 0.5 per cent, while BHP gained 0.4 per cent.

Suncorp’s share price finished 1.5 per cent lower after the insurer said car and home insurance premiums had increased at double-digit rates, and flagged more price rises.

Suncorp, the company behind insurance brands including AAMI and GIO, reported a sharp turnaround in its profits, with net profit of $1.15 billion, up from $681 million last year. In its Australian insurance division, profits jumped 334 per cent to $755 million, reflecting premium growth, higher returns on its investment portfolio, and lower costs.

Kerry Stokes-backed energy outfit Beach Energy recovered some ground after sliding more than 2 per cent early on Wednesday. It closed 0.3 per cent lower as investors digested the news of its newly appointed new chief executive, Brett Woods, an executive vice-president at Santos.

Woods replaces Morne Engelbrecht, who has been in the job about two years.

Although the market hasn’t reacted positively to the news, Royal Bank of Canada market analyst Gordon Ramsay said the change of guard was a good thing, assigning “positive” sentiment to the move and describing Woods as having “strong energy industry operational experience”.

Overnight on Wall Street, the S&P 500 fell 0.4 per cent and at one point was down nearly triple that. The loss was its fifth in the past six days after the index rocketed through the year’s first seven months. The Dow Jones retreated by 0.4 per cent and the Nasdaq lost 0.8 per cent.

Stocks of US banks fell after Moody’s cut the credit ratings for 10 smaller and midsized lenders. It cited a list of concerns about their financial strength, from the effects of higher interest rates to the trend of working from home that is leaving office buildings vacant.

Across the Pacific, stocks sank after a report showed exports for China’s troubled economy shrank by the most since the start of the pandemic in 2020.

And in Europe, bank stocks dropped after Italy’s cabinet approved a proposal to tax a chunk of their profits this year.

The worries layered on top of a mixed set of earnings reports from big US companies.

Tweet of the day

Quote of the day

“Our focus on sustainable performance has underpinned another year of good outcomes for our customers and stakeholders, and that is reflected in executive remuneration outcomes.“

That was Commonwealth Bank non-executive director Simon Moutter, who chairs the board’s people and remuneration committee.

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AP

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