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The CBA share price is up again on its plan to boost profits by $2 billion

It’s been the most heavily traded stock by both institutional and ‘mum and dad” investors on the S&P/ ASX200 today, with 1.5 million Commonwealth Bank of Australia (ASX: CBA) shares worth $108 million changing hands.

The stock is also up 1% today following on from a near 2% gain on Friday on the back of multiple news reports that the bank’s new chief executive Matt Comyn is looking to cut up to $2 billion of costs from the bank by making around 1 in 4 or 10,000 staff redundant.

This certainly seems a radical plan given it’s likely to badly hurt morale at what is a services and largely customer-facing business, while it will also not be popular with politicians keen to protect jobs.

However, it shows how determined the new CEO seems to be to protect the bank’s dividends probably under pressure from institutional investors.

The plan does seem extreme and it should be noted it is not much more than a rumour at the moment, although investors clearly like the idea of eventually taking $2 billion in costs out of a business that generated $4.6 billion in profits over its most recent half year.

Elsewhere other banks such as Westpac Banking Corp (ASX: WBC) and Australia & New Zealand Banking Group (ASX: ANZ) also edged between 0.5% and 0.9% higher.

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Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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