CBA at the brink again

Tuesday, 22 May 2018

There is no better bellwether for Australian fortunes than the CBA. It is still our largest bank and caretaker of Australia’s monstrous household debt. So it pays to keep tabs on the health of its equity.

The news is not terribly reassuring. As the royal commission has proceeded, and the CBA faces corruption allegations on just about everything that it touches, the consensus forward EPS growth outlook has fallen 10%:

This is the result of slowing lending as standards jump and higher costs for re-mediating cavalier risk management practices across the bank.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.