The CBA share price has struggled in the last month. Here's why

Australia's largest bank hasn't had an easy time of it lately…

| More on:
a man dressed in business clothes struggles to hold on to his computer in the face of strong headwinds.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The S&P/ASX 200 Index (ASX: XJO) has not enjoyed a great month over the past four weeks. As it stands on today's market moves, the ASX 200 has slipped by around 0.51% compared to this time in August.

But one major ASX 200 constituent has fared worse than the ASX 200 over the past month. That would be the ASX 200's largest bank (and presently largest company), Commonwealth Bank of Australia (ASX: CBA).

The Commonwealth Bank share price has underperformed the ASX 200 over the past month. While the ASX 200 has gone backwards by around 0.51%, CBA shares have gone from just under $105 a share a month ago to today's share price (at the time of writing) of $101.83 a share. That's a slide of around 3%.

So why this struggle for the CBA share price?

Why has the CBA share price underperformed the ASX 200 over the past month?

Well, it's important to note that ASX bank shares have been a hard-hit sector during the widespread lockdowns of the past few months. As my Fool colleague Kerry discussed last week, the ASX banks may be struggling with slowing housing and credit growth, as well as the potential of customers and businesses struggling to service loans in these difficult times.

After the initial excitement following CBA's earnings results last month, this could well be a factor in the recent poor run for the CBA share price.

But that brings us to a second possible catalyst for CBA's poor performance: its recent dividend and share buyback program.

During its FY21 earnings report, CBA announced a well-received final, fully franked dividend of $2 per share, alongside a $6 billion share buyback program. This payout went ex-dividend on 17 August which resulted in a 3% share price drop that day

New owners of CBA at and after this date are not eligible to receive this dividend, so it makes sense that its value leaves Commonwealth Bank's market capitalisation. CBA closed access to its share buyback offer the day before, on 16 August.

Both of these actions evidently resulted in investors adjusting the CBA share price accordingly. As such, these events are likely a major reason why CBA shares have gone backwards over the past month.

At the current CBA share price, this ASX bank has a market capitalisation of $180 billion, a price-to-earnings (P/E) ratio of 21.67 and a dividend yield of 3.43%.

Should you invest $1,000 in Opthea Limited right now?

Before you buy Opthea Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Opthea Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Bank Shares

man thinking about whether to invest in bitcoin
Bank Shares

Is this the right time to invest in Westpac shares after the interest rate cut?

Should investors bank on rate cuts helping Westpac?

Read more »

A woman sits at her computer with her hand to her mouth and a contemplative smile on her face as she reads about the performance of Allkem shares on her computer
Bank Shares

How did ASX bank shares react to the RBA decision?

The Reserve Bank of Australia just reduced interest rates by 0.25% in the second cut for 2025.

Read more »

A young woman sits at her desk in deep contemplation with her hand to her chin while seriously considering information she is reading on her laptop.
Dividend Investing

Dividends from ASX 200 bank shares 'looking very stretched': expert

The banks have always been a favourite choice among ASX dividend investors. But the outlook ain't great.

Read more »

A pink piggybank sits in a pile of autumn leaves.
Bank Shares

How much higher can the CBA share price rise?

One fund manager has given their view on the biggest bank.

Read more »

A young man goes over his finances and investment portfolio at home.
Bank Shares

Why is the Macquarie share price sinking today?

Let's see what is causing its shares to start the week in the red.

Read more »

Woman with spyglass looking toward ocean at sunset.
Bank Shares

Here's the earnings forecast out to 2029 for NAB shares

Let’s look at what experts are predicting for the bank.

Read more »

A man in a suit looks serious while discussing business dealings with a couple as they sit around a computer at a desk in a bank home lending scenario.
Bank Shares

Here's what Westpac says the RBA will do with interest rates next week

The RBA is meeting on Tuesday. Will it cut rates? Let's find out.

Read more »

A woman wearing yellow smiles and drinks coffee while on laptop.
Bank Shares

CBA shares top $170. Where to now?

Another day, another record high for CBA shares.

Read more »