CBA Shares Plummet 9.93% on Valuation Concerns

Commonwealth Bank of Australia's (ASX:CBA) shares fell by 9.93% in August, as investors reevaluated their valuation expectations following a record annual profit announcement.

The bank reported a cash net profit after tax of approximately A$10.98 billion for FY26, up roughly 7% year on year. However, the multiple at which CBA was trading - 25.42 times trailing earnings - came under scrutiny, with some analysts suggesting it is 34% above that of its three main competitors.

While the bank's operational quality remains strong, credit indicators added to caution. Home-loan arrears rose to 0.73%, and personal-loan arrears to 1.72%, largely attributed to cost-of-living pressures. The CET1 ratio of 12.0% remains comfortably above the regulatory minimum.

The Reserve Bank of Australia's credit-card reforms, which will cut consumer-credit interchange caps from 0.80% to 0.30%, also weighed on sentiment. CBA has responded by expanding its loyalty offering into CommBank Yello, a whole-of-bank rewards program covering roughly nine million customers.