Bourse leader Commonwealth Bank (ASX:CBA) has been down as much as -10% through Week 46, with shareholders seemingly unhappy with chief Matt Comyn’s suggestions they’re battling “competitive intensity.”
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Comyn heralded a $2.6 billion cash profit during the big four bank’s quarterly earnings earlier this week, which was, on paper, higher than last year.
It’s not quite what the market had been expecting, though – the CBA has been priced in for perfection, after all – and the country’s largest lender saw more than $20 billion in value wiped from the books Tuesday and Wednesday.
Perhaps the biggest pushback from holders came over Comyn’s comments around the same time, however, with the bank’s helmsman suggesting some rivals had been looking to “replicate CBA” in strategies and expansions.
“We are seeing continued competitive intensity and much greater competition over more affluent, metropolitan customers,” Mr Comyn explained Tuesday.
While he didn’t name any rivals specifically, The Market Link can point to big four competitors Westpac (ASX:WBC), NAB (ASX:NAB), and ANZ Group (ASX:ANZ), as well as fifth-spot hopefuls Macquarie Bank (ASX:MGQ) as likely culprits. “It felt like ‘replicate CBA’ in some of the strategies and results,” Mr Comyn continued. There has been a lot of convergence from a strategic perspective.”
There were also complaints over the bank’s slowing growth, though that was mainly due to sagging Net Interest Margins (NIMs), and a minor +4% increase in overall operating expenses through to late October.
Looking longer, it’s unlikely Commonwealth is really rattled by this Week 46 dump – unless the whole bourse drops, of course – with today already seeing the larger chunk of Australia’s “Mag Two” up +1.02% intraday.
(JD and I touched on all this on the HotCopper Wire episode this week, too, where we agreed the bluest of blue chips will still be okay.)
And if they aren’t – Comyn said they’d be keeping a close eye on things before anything unravels. “We are closely watching the increased competitive intensity and implications across the financial system, and we will continue to adjust our settings,” he explained alongside the bank’s quarterly Tuesday.
To mid-arvo Thursday, CBA shares have been at $159.99.
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