Commonwealth Bank of Australia (ASX: CBA) heads into the Christmas break with investors balancing two competing narratives: the bank’s still-strong operating fundamentals and capital position, versus a valuation that many analysts continue to label “stretched” and vulnerable to even small disappointments.
Because the ASX is closed on 25 December 2025, the most recent on-market reference point is the 24 December close, when CBA finished at A$161.39. [1]
CBA share price today: where the stock stands on 25 December 2025
CBA’s last traded price before the holiday shutdown was A$161.39 (24 Dec 2025 close), after a short, low-liquidity pre-Christmas session. [2]
That puts the stock about 15.7% below its 52‑week high of A$191.40 (25 Jun 2025), but still meaningfully above its 52‑week low of A$142.36 (14 Mar 2025), reflecting how quickly sentiment can swing between “defensive darling” and “too expensive.” [3]
Market-wide, the final session before the holiday closure (24 Dec) saw the ASX 200 fall, with banks among the drags in a session shaped by pre-holiday positioning and thin volumes. [4]
The biggest current CBA headline: “goodwill” refunds tied to ASIC’s fee review
The most material CBA-specific news hitting headlines into Christmas was the bank’s decision to commence further “goodwill payments” of about A$68 million to eligible concession customers, after public and regulatory scrutiny of fees charged to low-income customers. The bank says it expects to begin making those additional payments in early February 2026 and that customers “don’t need to do anything” because the bank will contact eligible customers. [5]
ABC reporting framed the move as a reversal after ASIC scrutiny, noting the review found customers were incorrectly charged a larger total amount in fees over multiple years, and that ASIC welcomed the refunds while warning some affected customers may still miss out. [6]
For investors, the immediate earnings impact of A$68 million is not existential for a bank of CBA’s size—but the story matters because it sits at the intersection of conduct risk, regulatory pressure, reputation, and remediation costs, themes that can influence bank valuation multiples even when core earnings are resilient. [7]
Macro watch: RBA minutes revive the risk of rate hikes in 2026
CBA’s outlook is tightly coupled to the interest-rate path, because rates influence net interest margins (NIM), deposit competition, credit demand, arrears, and (via the housing market) mortgage growth.
Minutes of the RBA’s 9 December 2025 meeting show market expectations for the policy rate had shifted materially in recent months—moving from pricing a cut by end‑2026 to pricing an increase—as economic data suggested stronger domestic momentum and risks that inflationary pressures could be building. [8]
Reuters, reporting on the RBA minutes, highlighted the Board discussing circumstances in which an increase in the cash rate might need to be considered in the coming year, while noting the cash rate was held at 3.60% and that upcoming inflation data would be pivotal for expectations into early 2026. [9]
Why this matters for CBA stock:
- If rates stay higher (or rise), banks can sometimes defend margins—but deposit pricing competition can also intensify as customers shop aggressively for yield.
- If rates fall, funding costs may ease, but “asset repricing” can compress margins and reduce the benefit of banks’ hedging/replicating portfolios over time (a recurring topic in bank analysis). [10]
What CBA’s latest trading update said about profit, margins, costs and credit quality
CBA’s latest major company update into year-end was its 1Q26 Trading Update (released 11 November 2025, covering the July–September 2025 quarter).
Key points CBA disclosed:
- Unaudited cash NPAT of ~A$2.6 billion, up 1% versus the 2H25 quarterly average and up 2% versus the prior comparable quarter. [11]
- Operating income up 3%, driven by lending and deposit volume growth, higher non‑interest income, and an extra 1.5 days in the quarter. [12]
- The bank said headline net interest margin reduced due to mix effects from strong growth in lower-yielding liquid assets and institutional repos, and that underlying margin was slightly lower due to deposit switching, competition and the lower cash rate environment. [13]
- Home lending grew +A$9.3 billion and household deposits grew +A$17.8 billion in the quarter, showing CBA still capturing scale-driven volume even while margin pressure remains the big debate. [14]
- Loan impairment expense of A$220 million (noted as 9 bps annualised of average gross loans and acceptances), while CBA said consumer arrears and corporate troublesome/non-performing exposures improved, helped by easier financial conditions after lower interest rates and inflation. [15]
- A CET1 capital ratio (APRA Level 2) of 11.8% as at 30 September 2025, above APRA’s minimum requirement (10.25%). [16]
Reuters’ coverage of the update captured the market’s key takeaway: profit was slightly higher, but competition and lower interest rates pressured margins, and the stock reacted because valuation left little room for ambiguity—particularly as CBA did not disclose an exact NIM figure in that update. [17]
Dividends: what income investors just received—and what’s next
Dividend expectations are a big part of why CBA remains widely held, especially among Australian income investors.
From CBA’s FY25 full-year release (for the year ended 30 June 2025), the bank reported:
- Cash NPAT: A$10.252 billion
- Dividend per share: A$4.85 (full year)
- Final dividend: A$2.60 per share, fully franked [18]
CBA’s dividend information page shows the FY25 final dividend record date was 21 August 2025 with payment on 29 September 2025, fully franked, and that a DRP was available (with no discount listed for that period). [19]
Looking forward, CBA’s own FY26 calendar sets out the next major dividend catalysts:
- Half-year results & interim dividend announcement: 11 February 2026
- Interim dividend ex-date: 18 February 2026
- Interim dividend record date: 19 February 2026
- Interim dividend payment date: on or around 30 March 2026 [20]
Those dates matter for near-term positioning, because bank share prices often trade with an “income calendar rhythm,” particularly around ex-dividend periods. [21]
Analyst forecasts and price targets: consensus remains well below the share price
Here’s the headline disconnect investors keep running into with Commonwealth Bank of Australia stock in late 2025:
- On the one hand, CBA is still viewed as a premium franchise (scale, technology, funding base, credit performance).
- On the other, many analysts argue the premium is already more than priced in.
MarketScreener’s compiled consensus (14 analysts) shows:
- Mean recommendation: SELL
- Average target price: A$121.62 versus last close A$161.39
- High target: A$146.00
- Low target: A$99.81 [22]
That average target implies roughly -25% downside from the 24 December close—exactly the kind of gap that keeps the valuation debate alive. [23]
Notable broker views currently shaping the narrative
A handful of widely-circulated calls explain the “why” behind those targets:
- UBS reiterated a Sell rating with a A$125 target price, citing valuation concerns and focusing on whether cost reductions and productivity could realistically justify the premium multiple. [24]
- A MarketIndex recap of broker reactions around the trading update and results season cited: Macquarie Underperform (A$106 target), JPMorgan Underweight (A$127 target), and Morgans Sell (A$96.07 target), with recurring concerns around margin pressure into FY26 and technology/vendor-driven cost inflation. [25]
- FactSet analysis of the sector argues Australian bank earnings momentum looked solid into FY25 finishes, but that FY26 guidance is likely to highlight moderating revenue trends and renewed margin pressure, with expense control increasingly “the main battleground.” The same piece notes banks trading on elevated forward earnings multiples relative to history, leaving little room for disappointment—an especially relevant observation for CBA given its premium status. [26]
The core investment debate: “best bank” vs “most expensive bank”
A useful way to think about CBA stock right now is that bulls and bears often agree on the facts—but disagree on what those facts are worth.
The bull case for Commonwealth Bank of Australia stock
Supportive points investors cite include:
- Scale in mortgages and deposits, and continued momentum in housing lending and household deposit growth in the latest quarter. [27]
- Capital strength, with CET1 still comfortably above regulatory minimums, even after quarter-to-quarter movement. [28]
- Credit quality holding up, with relatively low impairment charges and commentary that arrears improved as conditions eased. [29]
- A demonstrated willingness to invest in technology and capability (a double-edged sword, but potentially supportive for long-run competitiveness). [30]
- Operationally, the bank continues building out its AI agenda: industry reporting in December noted CBA appointing Ranil Boteju as Chief AI Officer, starting in early 2026, as part of a broader push to embed AI across operations. [31]
The bear case: valuation, margin compression risk, and “conduct overhang”
Common bear arguments include:
- Margin pressure from deposit switching and competition, explicitly flagged by the bank, with the additional sensitivity that comes from a premium valuation. [32]
- Cost inflation, particularly wages and IT vendor spend—again flagged by CBA and emphasized by multiple analysts. [33]
- Valuation stretch across the sector, with CBA singled out as particularly vulnerable to even small earnings misses. [34]
- Regulatory and remediation headlines, with the late‑December refunds story reinforcing how non-financial risk can re-enter the conversation quickly for banks. [35]
What to watch next: the practical catalyst checklist into early 2026
If you’re tracking Commonwealth Bank of Australia stock into the new year, the next few dates and data points are unusually “stacked”:
- Australian inflation data (late January 2026) — a key input for the rates outlook after the RBA minutes refocused attention on upside inflation risks. [36]
- RBA February meeting (3 February 2026) — where market pricing and guidance could shift again depending on inflation and labour data. [37]
- CBA half-year results (11 February 2026) — likely to put NIM, deposit competition, costs, and credit quality back in the spotlight. [38]
- Interim dividend timeline (Feb–Mar 2026) — ex-date 18 Feb, record 19 Feb, payment around 30 Mar (per CBA calendar). [39]
- Any follow-through on remediation and “goodwill payment” execution — the refunds are expected to commence in early February 2026, which means investors will watch how the program is operationalised and whether further scrutiny escalates. [40]
Bottom line on CBA stock on 25 December 2025
As of 25 December 2025, Commonwealth Bank of Australia stock sits in a familiar—but still tense—position: the franchise continues to generate strong earnings and dividends, while analysts broadly argue the share price already bakes in a near-best-case outcome.
The market will likely keep using the same yardsticks into early 2026: net interest margin trajectory, deposit competition, cost control (especially technology/vendor spend), credit quality, and how regulatory/conduct risks evolve. With the RBA’s rate outlook back in play and CBA’s interim result approaching in February, the next major “re-rating moment” probably isn’t far away. [41]
References
1. au.finance.yahoo.com, 2. au.finance.yahoo.com, 3. www.intelligentinvestor.com.au, 4. www.news.com.au, 5. www.commbank.com.au, 6. www.abc.net.au, 7. www.abc.net.au, 8. www.rba.gov.au, 9. www.reuters.com, 10. insight.factset.com, 11. www.commbank.com.au, 12. www.commbank.com.au, 13. www.commbank.com.au, 14. www.commbank.com.au, 15. www.commbank.com.au, 16. www.commbank.com.au, 17. www.reuters.com, 18. www.commbank.com.au, 19. www.commbank.com.au, 20. www.commbank.com.au, 21. www.commbank.com.au, 22. www.marketscreener.com, 23. www.marketscreener.com, 24. www.investing.com, 25. www.marketindex.com.au, 26. insight.factset.com, 27. www.reuters.com, 28. www.commbank.com.au, 29. www.commbank.com.au, 30. www.marketindex.com.au, 31. www.ciodive.com, 32. www.commbank.com.au, 33. www.reuters.com, 34. insight.factset.com, 35. www.abc.net.au, 36. www.reuters.com, 37. www.reuters.com, 38. www.commbank.com.au, 39. www.commbank.com.au, 40. www.commbank.com.au, 41. www.commbank.com.au
