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Australia’s CBA sees worst day in 2021 as interest margins fall

By Mensholong Lepcha

02:26, 17 November 2021

CBA logo outside its office
CBA logo outside its office – Photo: Shutterstock

Commonwealth Bank of Australia (CBA) was on track to see its worst day of the year as shares slumped over 7% after Australia’s biggest lender reported disappointing earnings for the September quarter.

CBA said net interest margin for the three months ended 30 September was “considerably lower in the quarter” without revealing the absolute figure.

Continued margin pressures pushed reported cash net profit after taxes from continuing operations 9% lower during the September quarter compared to the averages of the March and June quarters.

Intense home loan competition

Home loan price competition, switch to lower margin fixed rate loans and an ultra-low interest rate environment were the main drivers of the falling margins, the company said.

CBA’s competitors including National Australia Bank and Westpac have flagged identical margin pressures.


0.63 Price
+0.100% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 22:00 (UTC)
Spread 0.01168

Oil - Crude

74.50 Price
-1.560% 1D Chg, %
Long position overnight fee -0.0136%
Short position overnight fee -0.0083%
Overnight fee time 22:00 (UTC)
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+0.440% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 106.00


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+1.760% 1D Chg, %
Long position overnight fee -0.0193%
Short position overnight fee 0.0111%
Overnight fee time 22:00 (UTC)
Spread 0.30

In early November, Westpac investors looked past a multibillion-dollar share buyback to dump shares after the company reported a fall in net interest margin and missed cash earnings expectations.

Lowest since 1 September

On Wednesday, CBA stocks fell as much as 7.6% to see its worst intraday percentage fall since March 2020. Its intraday low of AUD99.5 was its lowest since 1 September.

Quarterly operating income fell 1% compared to the average of the preceding two quarter to AUD12.19bn ($8.88bn), CBA said.

Australia’s largest publicly listed company, CBA, is set to offer cryptocurrency trading services to customers through its CommBank app, as announced in early November.

Read more: Australia’s largest bank CBA to offer crypto trading services

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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