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ASX 200 rises, CBA climbs after FY21 report, Iress jumps

The S&P/ASX 200 Index (ASX: XJO) went up by around 0.3% today to 7,584 points. Here are some of the…
The post ASX 200 rises, CBA climbs after FY21 report, Iress jumps appeared first on The Motley Fool Australia. –

The S&P/ASX 200 Index (ASX: XJO) went up by around 0.3% today to 7,584 points.

Here are some of the highlights from the ASX:

Commonwealth Bank of Australia (ASX: CBA)

The CBA share price rose by more than 1% after the bank released its FY21 result.

It said that its cash net profit increased by almost 20% to $8.65 billion. Statutory profit also increased by around 20% to $8.84 billion.

CBA explained that its net profit increased because of improved economic conditions and outlook resulting in a lower loan impairment expense and a strong operational performance.

The loan impairment expense improved by 78% to $554 million whilst the net interest margin (NIM) declined by 4 basis points to 2.03%. CBA explained the NIM fell due to higher liquid assets and the ongoing impact of a low interest rate environment.

What captured the headlines was that the ASX 200 bank revealed a $6 billion off-market share buy-back. It also grew its full year dividend by 17% to $3.50 per share.

The bank’s common equity tier 1 (CET1) ended the financial year 150 basis points higher at 13.1%.

CBA CEO Matt Comyn said:

While the Australian economic recovery continued strongly through most of FY21, the pandemic continues to have an impact on the Australian economy, as well as the health of our communities. The ongoing roll-out of the vaccination program and government support packages will be important to help Australians and the economy on the path back towards full economic activity.

Iress Ltd (ASX: IRE)

Iress was one of the top performers in the ASX 200 today after receiving another takeover bid.

The fintech said that it has received an offer from EQT Fund Management that has an implied value of $15.91 cash per share, before franking credits. That comprises a cash offer of $15.75 as well as permitting the FY21 interim dividend for shareholders of up to $0.16 per share.

Iress said that it has agreed to grant EQT a period of exclusivity for 30 days to undertake its due diligence.

Subject to due diligence, agreement of a scheme implementation deed and the absence of a superior proposal, the board intends to unanimously recommend the offer to shareholders. However, no action is required to be taken by shareholders at this time.

The new offer has an implied value of a 45.3% premium to $10.95 per share, being Iress’ undisturbed share price on 9 June 2021.

Insurance Australia Group Ltd (ASX: IAG)

The ASX 200 insurance giant also revealed its FY21 result today.

It reported that its gross written premium (GWP) had risen by 3.8% to $12.6 billion. It was mainly rate driven, but it also saw promising new business growth and “stronger” customer retention. The rise of GWP helped insurance profit increase by 35.9% to just over $1 billion.

IAG’s cash earnings surged 168%, or $468 million, to $747 million. This measure excludes “one-off items”. That helped the annual dividend double to 20 cents per share.

However, the statutory bottom line sank to a net loss of $427 million. IAG explained that there were significant one-off corporate expenses mainly relating to business interruption, customer refunds and payroll remediation which impacted the overall result. Management said they are historical issues that have been identified, provisioned for and are fixing, and it’s making investments to continue to lift its risk management operational capabilities.

In FY22 it’s expecting GWP to grow in the low single digits, with a reported insurance margin of between 13.5% to 15.5% – it was 13.5% in FY21 (up from 10.1% in FY20).

The post ASX 200 rises, CBA climbs after FY21 report, Iress jumps appeared first on The Motley Fool Australia.

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More reading

The ASX reporting wrap-up: CBA, Mineral Resources, IAG

Why Accent, Bluebet, IAG, & Megaport shares are tumbling lower

CBA (ASX:CBA) share buyback ahead of forecast: broker
What you need to know about the CBA (ASX:CBA) dividend dates in 2021
CBA, James Hardie and Challenger profit in the spotlight. Scott Phillips on Nine’s Late News

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Insurance Australia Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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