ASB owner, the Commonwealth Bank of Australia, is expected to post a strong first-quarter result with cash earnings up about 4% on the second half of 2013, Craigs Investment Partners broker Greg Easton said yesterday.
The result, expected today, would be driven by good net interest income growth and a strong wealth result and positive jaws.
The jaws ratio is a measure used in finance to demonstrate the extent to which a trading entity's income growth rate exceeds its expenses growth rate, measured as a percentage.
Craigs was also forecasting a 10% lift in the dividend to $A1.81 ($NZ1.96) a share.
Mr Easton was forecasting first-half cash earnings of $A4.19 billion, slightly above the Bloomberg consensus.
''Our cash earnings growth forecast of 3.9% is expected to be driven by a pick-up in revenue growth to 3.1% half-on-half, based on good asset growth and supportive deposit margins. While cost control is unlikely to be a driving factor, we still expect positive jaws for the first half.''
Given first-quarter cash earnings of $A2.1 billion, CBA required little growth in the second quarter to meet first-half forecasts, suggesting potential upside risk if first-quarter momentum had continued, he said.
Asset quality would be an area of interest, he said.
