SYDNEY, Jan 15, 2026, 04:52 AEDT
- CBA dropped 1.3% to close at A$152.88 on Wednesday, underperforming the modest gains seen in the ASX 200
- Morgan Stanley pointed to CBA’s valuation premium of about 45% over peers as a potential risk to returns in 2026
- CBA wage data revealed a 0.8% rise in wages for the quarter ending December, with unemployment steady at 4.3%
Shares of Commonwealth Bank of Australia CBA.AX dropped 1.3% on Wednesday, ending at A$152.88, while the broader market inched up. The stock fluctuated between A$150.92 and A$154.96 during the session.
The move throws the valuation question back into focus. CBA’s shares have traded well above other big banks, but upcoming events in the next few weeks could swiftly shift rate expectations and earnings forecasts.
The S&P/ASX 200 closed up 0.14%, buoyed by gains in mining and energy sectors, while financial stocks dropped 0.7%. Craig Sidney, senior investment adviser at Shaw and Partners, noted a shift away from banks toward miners like BHP and Rio Tinto.
Morgan Stanley cautions that 2026 might once again see major banks diverging sharply, with performance gaps exceeding 20%. It singled out CBA as a potential underperformer, noting its roughly 45% premium to peers and a price-to-earnings ratio near 25.
CBA reported Tuesday that its Wage and Labour Insights tracker, which draws on de-identified salary data from around 400,000 accounts, continues to signal a tight labour market. Wages climbed 0.8% in the quarter and 3.1% over the year to December. Employers added roughly 23,000 jobs, while unemployment steadied at 4.3%. “The labour market remains tight,” said CBA economist Belinda Allen, noting the RBA is expected to raise the cash rate in 2026. “We judge the labour market to be slightly tight.” https://www.commbank.com.au/articles/newsr…
Rate expectations are crucial for banks since they influence mortgage repricing and the costs lenders face to hold deposits. Net interest margin, or NIM, measures the gap between a bank’s earnings on loans and its funding expenses.
The Reserve Bank of Australia is set to announce its next policy decision on Feb. 3, following a two-day meeting. The central bank’s statement is slated for 2:30 p.m. AEDT.
Attention is also turning to company news. CBA will release its half-year results and declare an interim dividend on Feb. 11. The stock is expected to trade ex-dividend on Feb. 18, with the payment scheduled for about March 30.
Morgan Stanley’s note flagged ANZ as a contender for another solid year, while it views CBA as more vulnerable if momentum fades. NAB and Westpac fall somewhere in between, with execution and cost control likely to weigh heavier than broader macro trends.
The trade can reverse quickly. Should deposit competition remain fierce, credit growth falter, or bad debts rise, CBA’s premium would likely evaporate fast — and any shift in rate pricing would only accelerate the decline.
The outcome could still stabilize if rates remain steady and borrowers continue meeting payments, helping margins hold up better than expected. Investors in CBA are buying security and rarely put up with unexpected shocks.
