Sydney, Feb 3, 2026, 16:55 AEDT — The market has closed.
- Shares of Commonwealth Bank of Australia CBA.AX ended Tuesday roughly 0.7% higher.
- Investors digested the RBA’s first rate increase in two years along with new guidance on future hikes.
- Attention turns to CBA’s half-year results on Feb. 11, following the bank’s warnings about one-offs and alterations in reporting.
The Commonwealth Bank of Australia share price closed up around 0.7% on Tuesday, lifted by a rate hike and a company update ahead of next week’s earnings. CBA.AX gained as traders absorbed the news.
Why it matters now: As Australia’s largest lender and a major player in the benchmark, CBA’s movements—however small—can sway the entire market. This policy shift hits just as the earnings season begins to pick up steam.
Investors are weighing if higher rates will boost bank earnings via wider margins or mostly result in softer credit demand and rising bad-debt charges. The situation can shift fast.
CBA closed at A$152.57, having fluctuated between A$151.78 and A$154.05, with around 738,000 shares changing hands, according to data from Investing.com.
The ASX 200 closed up 0.9%, though it pulled back from earlier gains following the announcement, according to an ABC News market live blog. RBA Governor Michele Bullock commented, “I don’t know if it is in a cycle,” while David Bassanese of Betashares noted, “Is one rate rise enough? Only time will tell.” ABC News
The Reserve Bank of Australia raised the cash rate target by 25 basis points — with one basis point equal to 0.01 percentage point — bringing it to 3.85%. Reuters reported that markets are now pricing in nearly an 80% chance of another hike in May. Harry Murphy Cruise from Oxford Economics Australia noted that “the risk is clearly skewed toward a series of hikes,” while Abhijit Surya of Capital Economics warned that “the road to disinflation will be a long and winding one.” Reuters
A filing with the Australian Securities Exchange on Tuesday revealed CBA set aside a A$68 million pre-tax provision for extra goodwill payments to certain customers following a review by the Australian Securities and Investments Commission. The bank also reported A$53 million in non-recurring income, which included a milestone payment from selling Commonwealth Insurance Limited and a fair-value gain on its stake in Gemini after the company’s IPO. The update showed cash net profit after tax of A$5.12 billion for the six months ending Dec. 31 — CBA’s preferred underlying profit metric. It also recorded a A$406 million loan impairment expense, a bad-debt charge. The bank confirmed its full half-year results will be released Feb. 11, accompanied by a webcast with CEO Matt Comyn and CFO Alan Docherty.
The rate hike gave the sector a boost. ANZ Group, National Australia Bank and Westpac Banking Corp all climbed between 0.8% and 1.2%. Financials as a whole gained around 0.8%, according to Market Index.
The set-up isn’t straightforward. If deposit competition heats up or funding costs surge, banks may find it tough to maintain net interest margin — the gap between earnings on loans and costs on deposits — despite rising headline rates. At the same time, borrowers facing steeper costs could push arrears higher.
With markets shut, all eyes will be on bank stocks Wednesday for follow-through. Investors will also track any early signals on how fast lenders adjust mortgage and deposit rates in response to the RBA’s move. Those initial repricing reports could shift sentiment quickly.
CBA will release its interim results on Feb. 11. The central bank’s next policy announcement is scheduled for 2:30 p.m. on March 17. Investors remain split on whether Tuesday’s decision was a one-time move or the beginning of a longer trend.
Related articles: ASX:CBA
