The Commonwealth Bank of Australia (ASX: CBA) share price underperformed its big four counterparts on Wednesday. This came as Australia's largest bank advised it has seen a surge in requests for loan deferrals from its financially struggling customers.
On Tuesday, the CBA share price hit a monthly low before bouncing back up yesterday to finish the day at $98.42, up 0.83%. Despite the increase, the company's share price underperformed the other big ASX banks.
Let's take a look at what CommBank had to say.
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CBA lends further support
The resurgence of COVID-19 cases across Australia, and the associated lockdowns, has seen many businesses battling to stay afloat.
As the super infectious Delta variant spreads through communities, CBA chief executive Matt Comyn advised the bank had received over 500 requests for financial assistance on Tuesday alone, according to 7 news. And arguably, that number could be likely to grow in the near future as half of Australia goes through another lockdown. Most notably, Melbourne, with a population of more than 5 million, is now in its fifth lockdown since March 2020.
Unfortunately, non-essential businesses have been forced shut by state governments, further weighing on an already fragile economy.
To help customers and businesses alike, CBA is accepting loan deferrals for two months, as well as offering other tailored solutions. This follows similar support that was handed down during last year's recession. CBA did advise, however, it expects foreclosures to be minimal.
CBA's Comyn stated he is predicting the economy to be weaker during the September quarter. Although once restrictions are eased across the country, he believes the economy will "bounce back quite strongly".
Meanwhile, the Australian Taxation Office ended its 'short cut' tax deduction allowance at the end of last financial year (30 June 2021). This allowed people working from home to claim 80 cents per hour to cover associated costs. There have been calls to extend the temporary tax measure into the new financial year while current lockdowns persist.
CBA share price summary
As COVID-19 has continued to wreak havoc on the Australian economy, the CBA share price has managed to ascend. Despite only managing a modest gain of 0.37% over the past month, the banking giant's shares have risen almost 33% since this time last year.
CBA is the ASX's largest company on valuation grounds, holding a market capitalisation of roughly $174.6 billion. The company has more than 1.7 billion shares on its books.
