The Commonwealth Bank of Australia (ASX: CBA) share price went up nearly 5% today as euphoria enveloped the banking sector.
Australia's biggest bank's share price finished at $73.60, the highest it has been in almost six months.
Commissioner Hayne seemed to be fairly pleased with the CBA response, saying "I was persuaded that Mr Comyn, CEO of CBA, is well aware of the size and nature of the tasks that lie ahead of CBA."
However, CBA isn't totally out of the woods. In its ASX release CBA referred to the Royal Commission report where it said "a number of matters regarding the Group's conduct including in relation to superannuation warrant further investigation by relevant regulators and we will cooperate fully with these investigations."
CBA has already taken action to improve its culture and governance, including the divestment of its global asset management business to Mitsubishi UFJ Trust and Banking Corporation for $4.13 billion.
Although it seems ASIC thinks CBA should have done a bit more by now when it came to the enforceable undertaking with CBA Financial Planning (CFP), where the regulator has temporarily banned CFP from charging ongoing fees until it fixes some of the issues identified by Ernst & Young and ASIC.
Is the CBA share price a buy?
After the end of trading today, CBA has a trailing grossed-up dividend yield of 8.4% and is valued at a bit over 13x FY19's estimated earnings.
CBA does not strike me as a value pick after today's rise, particularly with the threat of the removal of franking credit refunds still looming. CBA could be a decent pick for income, assuming the housing market doesn't keep tanking for the rest of the year, but total returns could be disappointing for the next couple of years at least.
