Why Is CBA Paying a Fully Franked AUD 1.14 Dividend on PERLS XIII Now?
Commonwealth Bank of Australia announces a fully franked quarterly distribution of AUD 1.1405 per security on its PERLS XIII capital note, payable mid-September 2025.
- AUD 1.1405 fully franked dividend declared for CAP NOTE 3-BBSW+2.75% PERP NON-CUM RED T-10-26
- Distribution covers quarter ending 15 September 2025
- Payment date set for 15 September 2025, with ex-date 4 September and record date 5 September
- Dividend based on a 4.5247% annualised rate derived from 90-day bank bill swap rate plus margin
- Distribution discretionary under PERLS XIII terms but expected to be paid in full
Dividend Announcement Overview
Commonwealth Bank of Australia (CBA) has declared a fully franked ordinary dividend of AUD 1.1405 per security on its PERLS XIII capital note (ASX code CBAPJ). This distribution relates to the quarterly period ending 15 September 2025 and will be paid on 15 September 2025. Investors holding the notes as of the record date, 5 September 2025, will be eligible for the payment, with the ex-dividend date set for 4 September 2025.
Calculation and Rate Details
The dividend rate is anchored to the 90-day bank bill swap rate as of 16 June 2025, plus a margin of 2.75%, resulting in an annualised distribution rate of approximately 4.5247%. This rate accounts for a 30% corporate tax adjustment, reflecting the fully franked nature of the dividend. The distribution amount per security is AUD 1.1405, representing the scheduled cash payment for the 92-day period from 15 June to 14 September 2025.
Franking and Payment Conditions
Importantly, the dividend is fully franked, meaning it carries a 30% franking credit, which can be advantageous for Australian resident investors seeking tax-effective income. The payment will be made by electronic transfer, ensuring a smooth and timely receipt for security holders. While the distribution is scheduled, the terms of the PERLS XIII capital notes grant CBA discretion to defer payments if necessary, though no such deferral is anticipated at this time.
Investor Implications and Market Context
This announcement provides clarity for investors on expected income from the PERLS XIII notes, which are a popular hybrid security in the Australian banking sector. The steady distribution rate aligned with prevailing market interest rates suggests CBA’s confidence in maintaining its capital note obligations amid current economic conditions. For fixed income portfolios, this dividend reinforces the yield profile of these securities, while the full franking adds an attractive tax component.
Looking Ahead
Investors should monitor any future announcements for changes in distribution policy or shifts in the underlying interest rate environment that could impact subsequent payments. The discretionary nature of the dividend under PERLS XIII terms remains a factor to watch, particularly in volatile market conditions or regulatory changes affecting bank capital instruments.
Bottom Line?
CBA’s fully franked dividend on PERLS XIII notes signals steady income but keeps investors alert to discretionary payout risks.
Questions in the middle?
- Will CBA maintain the current distribution rate if market interest rates shift significantly?
- How might regulatory changes impact the discretionary nature of PERLS XIII dividend payments?
- What are the implications for fixed income investors if CBA opts to defer future distributions?
