Why is the Aussie bank bubble bursting?

Thursday 22 January 2026

The great CBA bubble is deflating.

The valuation metrics got completely out of hand.

The forward P/E has tanked to about 24x, still well above the historical average of about 15x, so there is room for more falls.

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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.