The past few months have been rough on the Commonwealth Bank of Australia (ASX: CBA) share price.
On August 1, just before news of the anti-money laundering and terrorism financing scandal broke, CBA shares closed at $84.54.
On Friday, CBA shares closed at $76.30.
The share price of other big banks over the same period of roughly three months shows how badly CBA has been suffering when compared to its competitors.
The National Australia Bank Ltd. (ASX: NAB) share price has moved from $30.08 to $31.43.
The Westpac Banking Corp (ASX: WBC) share price has gone up from $32.07 to $32.14.
And the share price of Australia and New Zealand Banking Group (ASX: ANZ) has dropped slightly from $29.76 in early August to close on Friday at $29.48.
For those with shares in Australia's big banks, the future may not be so bright.
There are key questions big bank shareholders should be asking:
How low can the CBA stock price go? And how will the CBA's prospective fines potentially, worth hundreds of millions of dollars, hit other banks?
For both answers we could look to how the share price of other banks was impacted after significant fines were handed down.
In September last year, when the US Department of Justice demanded $14 billion from Deutsche Bank for mis-selling mortgage bonds between 2005 and 2007, the bank's share price plunged to a low not seen since the mid-1980s.
The scandal reverberated across the markets and the share price of other banks suffered.
A few months later Deutsche Bank's results were hit again by legal costs associated with the scandal and its share price took another tumble.
Similarly, the Wells Fargo share price sunk to a two-and-a-half year low after it was hit by a $185 million fine for creating fake bank accounts.
As such, it seems there's potential for CBA stock to slide further.
It will be months before the real impact of the anti-money laundering and terrorism financing scandal and its cost to CBA shareholders is known.
The bank's legal bills could run into hundreds of millions of dollars and, if it is determined that some of the suspect transactions involved US dollars, CBA could face scrutiny from other jurisdictions.
It's rumoured that regulators outside of Australia are already taking a close look at CBA's activities.
It is clear that CBA is in a bit of trouble. What is not clear is how much trouble the bank is in and how much the scandal will impact the sector.
