The Commonwealth Bank of Australia (ASX: CBA) share price has fallen to $76, which is almost the lowest price it has reached during 2017.
Commonwealth Bank has nearly always traded at a premium compared to its peers, but the recent troubles have brought it much closer.
Is the latest scandal worth worrying about?
Commonwealth management and the lawyers will try to defend the bank's position as much as possible.
I don't think the fine will have much of an impact on earnings, particularly when you consider how many billions of dollars Commonwealth Bank earns in profit.
The fine would have to be more than $200 million to have a noticeable impact.
The dividend yield
Most retail investors choose to invest in the big four banks because of their impressive dividend yields.
The current grossed-up dividend yield is now 8.01%, thanks to a decent increase to the dividend from its latest result.
Near-term outlook
The Australian economy has proved the naysayers wrong for many years. The GFC wasn't enough to stop growth. Warnings have been sounded about the economy for several years but it keeps growing.
A number of metrics are as worrying as they have ever been, such as household debt and households under financial stress.
It's almost guaranteed that a recession will happen in the future, it's just a question of when.
Time to buy?
Commonwealth Bank shares are trading much more attractively now than when the price was in the $80s. However, I think there's a strong chance that the share price will reach the $60s (or lower) again in the next couple of years if the economy falters.
