Credit Risk Analysis of Cba

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1. KEYS TO SUCCESS

Operating in the ever challenging banking industry in Australia, Commonwealth Bank of Australia (CBA) aims to succeed through focusing on 5 main strategic areas:

Customer service

CBA believes that customer satisfaction is pivotal in creating value. Over the years, it emphasised employee training to deliver top-notch services to customers. CBA aims to add over 1000 employees to serve their growing customer base over the next 4 years.[1] It has also been awarded numerous awards for its excellence customer satisfaction.[2]

Business banking

CBA aims to be the leader in total capital solutions. It introduced the contactless card payment facility and more user-friendly and reliable features in CommBiz to increase banking efficiency.[3] This increased its share of the total business lending market.[4]

Technology and operational excellence

CBA invested in Core Banking Modernisation as its new banking platform, and CommBiz, enabling 24-hour real-time banking and transaction. CBA also introduced the paperless end-to-end Home Loan process, improving cost efficiency.[5]

Trust and team spirit

CBA encourages staff participation while providing equal opportunity to all its employees. Staff turnover and absenteeism have declined significantly while average group satisfaction has increased.[6]

Profitable growth through strategic management

CBA focuses on its existing local customers while expanding internationally through a partnership with Vietnam International Bank, joint venture with China’s Bank of Communication and a branch opening in Mumbai, India.[7]

2. FINANCIAL RISK ANALYSIS

In order to evaluate CBA’s financial performance, we will conduct an analysis on the financial statements, profitability, adequacy of future cash flows, and liquidity of CBA.

1. Interpreting the Financial Statements

1. Capitalisation and Leverage

CBA has a current market capitalisation of $79,829M.

With a substantial increase

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