Is Commonwealth Bank of Australia Approaching New Highs Undeterred?

Team Veye | 29-Jul-2024

Commonwealth Bank of Australia (ASX: CBA) maintains a dominant presence in the Australian Banking Industry, displaying a resilient and consistent growth pattern reflected in the company's significant revenue and earnings growth in recent years. 

The Bank is presently undergoing significant foundational improvements that are set to enhance the marketability of its offerings and services.

Commonwealth Bank maintains a dominant presence in the Australian banking industry, displaying a resilient and consistent growth pattern reflected in the company's significant revenue and earnings growth in recent years. 

On 19 July 2024, the Commonwealth Bank of Australia shared an update regarding a previous disclosure about legal proceedings served on ASB on 29 September 2021. The plaintiffs sought to initiate a representative (class action) proceeding against ASB in the High Court of New Zealand, relating to ASB's compliance with parts of the Credit Contracts and Consumer Finance Act 2003 (CCCFA). This act requires variation disclosure to be issued when customers and ASB make agreed changes to loan agreements captured under the CCCFA. The Court of Appeal confirmed on 19 July 2024, the earlier Court's decision to allow the plaintiffs to bring the action against ASB as an opt-out representative action.

Additionally, in June 2024, the Federal Court of Australia ruled in CBA's favour and dismissed the two class actions commenced against CBA in 2017 and 2018.

Furthermore, Fitch earlier upgraded CBA's Long-Term and Short-Term Issuer Default Rating by 1-notch to AA- and F1+, respectively. Moody's also upgraded CBA's adjusted baseline credit assessment by 1-notch, reflecting CBA's strong Financial Metrics, which Moody's has assessed as consistently stronger or at the higher end of CBA's domestic peer group.

CBA’s approach to enhancing its digital offerings has already resulted in positive outcomes with a wide range of digital transactions, increased digital customers, and an improvement in its Net Promoter Score (NPS). The company's ongoing initiatives to expand its digital offerings through the introduction of CommBank app 5.0 and CommBank Yello are expected to further enhance customer experiences and marketability.

Technically, also it continues to be bullish, occasionally taking support at 14 EMA (Exponential moving average) on the daily timeframe. It is making “Higher high” on the monthly chart. However, price action moving into oversold on the weekly timeframe may cause minor retracement. Having strong support at $125, maintaining which, it can have the potential to continue moving upwards.

Source: Company’s Report

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