CBA Declares AUD 2.25 Fully Franked Dividend for FY24

Dividend Announcement Overview

Commonwealth Bank of Australia (ASX: CBA) has declared an ordinary dividend of AUD 2.25 per fully paid ordinary share, fully franked at the corporate tax rate of 30%. This dividend pertains to the six-month financial period ending December 31, 2024, underscoring the bank's continued profitability and commitment to returning value to shareholders.

The dividend will be paid on March 28, 2025, with an ex-dividend date of February 19, 2025, and a record date of February 20, 2025. Shareholders registered by the record date will be eligible for the payment.

Dividend Reinvestment Plan Details

CBA maintains a Dividend Reinvestment Plan (DRP) for this dividend, allowing shareholders to reinvest their dividends in additional shares without any discount to the reinvestment price. The DRP price will be calculated as the average daily volume weighted average price of CBA shares traded on the ASX or Cboe over the 20 trading days from February 24 to March 21, 2025.

The deadline for shareholders to elect participation in the DRP is 5:00 pm on February 21, 2025. Notably, the default option for shareholders who do not make an election is to receive the dividend in cash.

Currency and Tax Considerations

In a nod to its international shareholder base, CBA offers dividend payments in multiple currencies. Shareholders with registered addresses in Australia, New Zealand, and the United Kingdom will receive payments in their local currency (AUD, NZD, or GBP respectively). Additionally, shareholders worldwide can elect to receive dividends in their preferred currency through arrangements with OFX Group Limited, provided their nominated bank account is in the corresponding country.

The dividend is fully franked, reflecting the bank’s strong tax position and providing Australian shareholders with franking credits that can offset their tax liabilities. For New Zealand shareholders, a New Zealand Imputation Credit of NZD 0.15 per share is also available.

Broader Implications and Investor Sentiment

This dividend announcement signals CBA’s robust earnings and confidence in its ongoing cash flow generation. The absence of any discount on the DRP price suggests management’s intention to maintain shareholder value without diluting equity. What's more, the multi-currency payment options demonstrate CBA’s sensitivity to its diverse investor base, potentially enhancing shareholder satisfaction and retention.

Investors will be watching closely how the stock performs leading up to the ex-dividend date, as well as how the market interprets this dividend in the context of broader economic conditions and banking sector dynamics.