After easing off in September, the Commonwealth Bank of Australia (ASX: CBA) share price once again raced ahead of the benchmark in October.
On 30 September, shares in the S&P/ASX 200 Index (ASX: XJO) bank stock closed trading for $135.39. At the time of writing, with just a few hours of trade left in October, CommBank stock is trading for $142.09 a share.
This sees the CBA share price up 5.0% over the month, smashing the 1.4% loss posted by the ASX 200 in October.
As you can see on the above chart, this outperformance is nothing new.
While the ASX 200 has gained a very healthy 20% over the past full year, CommBank shares have rocked a whopping 47%. And that's not even including the $4.65 in fully franked dividends CBA delivered over the 12 months.
Here's what helped Australia's biggest bank once more outperform in October.
Image source: Getty Images
Why did the CBA share price smash the ASX 200 in October?
A number of stars aligned to send the CBA share price soaring higher in the month almost past.
First, the great rotation we witnessed out of ASX 200 bank stocks and into ASX 200 mining stocks in late September reversed in the early weeks of October. The September rotation followed significant new stimulus measures announced by the Chinese government to spur economic growth, which in turn saw copper and iron ore prices take off.
But follow up stimulus announcements from China in early October fell short of market expectations, sending the iron ore price sharply lower. And investors responded by exiting some of their mining positions and buying ASX 200 bank stocks.
The CBA share price also appears to have benefited from the company's annual general meeting (AGM), held on 16 October.
Chairman Paul O'Malley reminded shareholders that in FY 2024, "We returned $8 billion to shareholders in dividends and share buybacks."
And CEO Matt Comyn noted that over the year, CommBank was rated by Moody's "as one of only five banks globally with the highest financial strength."
Looking ahead, Comyn added, "We have the strength and stability to support customers when needed and play our part in stimulating economic growth by lending to productive parts of the economy."
What other tailwinds did CommBank enjoy?
The CBA share price also appears to have caught some tailwinds in the latter weeks of October, following a strong quarterly update from JP Morgan Chase & Co. (NYSE: JPM), one of the world's biggest banks.
Among the core metrics boosting investor sentiment in global banking stocks, the US bank reported a 1% increase in loan origination with a 10% drop in deposits. This saw that bank's net interest income (NII) increase by 3% to US$23.5 billion.
How did this help the CBA share price?
As Motley Fool analyst Zach Bristow pointed out:
Being one of the world's largest banks, the growth in revenues and earnings suggests that global banking conditions are strengthening. If sentiment persists, this could flow through to names such as Commonwealth Bank…
It also highlights that while interest rate pressures remain, major banks are finding ways to sustain profitability.
