Shares in Commonwealth Bank of Australia (ASX: CBA) finished 7 percentage points higher last week to close out at $106.29 apiece.
The bank has outstripped its peers this month and is currently up more than 5% for the year to date after thrusting off lows of $94.50 in early March.
At the time of writing, the CBA share price is 0.77% higher, trading at $107.11.
Why's the CBA share price pushing higher?
Commonwealth Bank shares have bounced off their previous low with ferocity despite there being no market-sensitive information from the company since 1 March.
The bank also leads the sector as the S&P/ASX 200 Financials index (ASX: XFJ) has climbed 2.5% since January and is now tracking in a vertical uptrend.
Nevertheless, financials are strengthening to now front-run most other corners of the market as of March.
Beforehand, the CBA share price was rangebound and had been stuck in an all-out war between the bears and bulls for around 4 months, with prices dancing within a lengthy sideways channel (shown below).
However, whispers of a potential hike to base interest rates by the Reserve Bank of Australia (RBA), alongside a shifting macroeconomic narrative have seen bank shares flourish lately.
Market pundits have deemed the prospects of a rate rise positive for ASX banks as they are set to benefit from higher average monthly mortgage payments.
For instance, a hike to 2.15% on variable mortgage rates would see average monthly mortgage payments rise by 29% from their February 2022 level.
And it appears banks like CBA are capitalising on the state of affairs. Underwriting on more risky products increased during the most recent quarter, something all banks need to be wary of, according to JP Morgan.
"The proportion of new housing loans funded by the major banks with a debt-to-income [greater than] >6x increased to 28% in the quarter", the broker said in a recent note.
"We expect growth in higher-risk segments increases the likelihood of APRA introducing new macro-prudential restrictions."
One other factor is that S&P Global Ratings recently deemed that Australian banks have little to no exposure to Russia, Ukraine and Belarus.
The ratings agency – that provides its economic assessment on the solvency of companies and countries alike – determined the "main fallout for the Australian banks could be a global financial market dislocation, leading to disruption in their access to global funding and a rise in the cost of funding."
Given S&P's standing as a gold-standard in 'safety' ratings, the market could view its assessment of Aussie banks as a vote of confidence moving forward.
Investors appear to consider the Commonwealth Bank well-positioned from here, possibly backed by robust fundamentals. Its balance sheet has grown substantially over the years, with total assets climbing 18% from FY18 to $1.15 billion.
Meanwhile, its book value and market cap have grown by 11% and 42% respectively in that time, whereas the ASX financials index has climbed just 2%.
It also gave investors a return on equity (ROE) of 15% and free cash flow over $14.5 billion in H1 FY22, whilst analysts estimate a dividend of $2.02 for H2 FY22, per Bloomberg data.
CBA share price snapshot
In the past 12 months, the CBA share price has jumped more than 25% into the green and is now sitting around 7% higher after last week's trading.
It has flourished this year to date following an 8% spike over the past month and is well ahead of the broad index's return in that time.
