Commonwealth Bank of Australia (ASX: CBA) shares have been an excellent investment over the last 30 years for Aussies. One of the best aspects of owning the ASX bank share has been the dividend payments.
Dividends aren’t guaranteed of course, but when a business generates resilient net profit, then it can deliver reliable (and hopefully growing) dividends.
CBA may be the most reliable of the big four ASX bank shares, but it’s good to consider what the dividend may look like. Let’s look at analyst estimates for the next couple of financial years.
FY26
We’re close to the end of the 2026 financial year, though we’ve only seen the FY26 interim dividend from CBA at this stage.
The ASX bank share will announce the dividend for the second half of FY26 with its annual result in August.
The independent forecast on Commsec suggests that the bank’s annual dividend per CBA share could be $5.15 in FY26. At the time of writing, that translates into a grossed-up dividend yield of 4.5% for FY26, including franking credits.
The latest update from the bank was its FY26 third-quarter update. What happens with its financial performance is essential because profit funds the dividend payments, so investors should consider the business’ performance if they’re hoping for compelling dividend growth.
It reported a quarterly cash profit of around $2.7 billion. While this represented a year-over-year increase of 4%, it was a 1% reduction compared to the quarterly average of the first half of FY26. A mixed bag. Profit generation is key for the CBA share price.
CBA noted that underlying expenses increased 1% largely because of higher cloud computing volumes, software licensing and investment in AI capabilities.
However, on the income side, operating income was flat in the quarter, with a stable net interest margin (NIM). The ASX bank share noted 12.5% ($21.6 billion) business lending growth, 9.1% ($38.3 billion) household deposit growth and 7.1% ($41.2 billion) home lending growth.
But, CBA also faced a $316 million loan impairment expense for the quarter, with higher collective provisions reflecting heightened geopolitical and macroeconomic uncertainty. Commonwealth Bank did try to reassure investors by stating its underlying portfolio credit quality remains sound.
FY27
CBA will also have to deal with the potential flow-on effects from changes to the Australian taxation system in FY27 (and onwards). The adjustment to negative gearing and capital gains tax could impact demand for loans.
I’m not sure how Australian property prices will go over the longer-term, but it’s possible there could be some headwinds in the shorter-term, which could show up in CBA’s financials.
Hopefully, for CBA’s sake, owner occupiers can make up the demand for established homes and investor capital refocuses on (building) new properties rather than reducing overall.
I’m optimistic that CBA’s earnings can remain resilient while continuing its good business loan growth.
The current projection on Commsec suggests the business can pay an annual dividend per CBA share of $5.45 in FY27, a solid increase of 5.8%. That translates into a forward grossed-up dividend yield of 4.9%, including franking credits.
With a forward yield of less than 5%, there could be other ASX shares that offer better dividend income.
The post Here’s the dividend forecast out to 2027 for CBA shares appeared first on The Motley Fool Australia.
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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 has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.