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Commonwealth Bank of Australia CBA

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Morningstar’s Analysis

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Currency in AUD
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Taking Some Heat Out of a Surging Mortgage Market Ain't Necessarily a Bad Thing for Australian Banks

Nathan Zaia Equity Analyst

Analyst Note

| Nathan Zaia |

Australian major bank CEOs, the International Monetary Fund, and even the Australian federal treasurer have sounded the alarm about the risks to the financial system due to households taking on more debt. With the Reserve Bank’s cash rate target at 0.1%, it’s never been cheaper to borrow money. With homeowners taking on more debt and sluggish wages growth, the risks to financial stability from an economic shock continue to rise. Hence, we think the Australian Prudential Regulation Authority, or APRA, will introduce macro prudential measures to slow the rise in high debt/income loans in coming months.

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Company Profile

Business Description

Commonwealth Bank is Australia's largest bank with operations spanning Australia, New Zealand, and Asia. Its core business is the provision of retail, business, and institutional banking services. The bank has emphasised its focus on banking in recent years with a numbers of asset divestments in wealth management and insurance.

Contact
201 Sussex Street, Ground Floor, Tower 1
Sydney, NSW, 2000, Australia
T +61 293782000
Sector Financial Services
Industry Banks - Diversified
Most Recent Earnings
Fiscal Year End Jun 30, 2022
Stock Type
Employees 46,189

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