The Commonwealth Bank of Australia (ASX: CBA) has shaken off this week's malaise and is well into the green in afternoon trading.
At time of writing, the CBA share price is up 2.3% to $98.96 per share.
The S&P/ASX 200 Index (ASX: XJO) is gaining as well, up 0.3%.
If CBA finishes in the green today it will be the first time this week since Monday's 0.1% rise that the CBA share price has closed the day higher.
Now here's what's been happening with CBA this week.
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Interest rates are on the rise
Yesterday The Motley Fool reported that CBA had raised its fixed lending rates for owner-occupiers and investors.
Owner-occupiers will pay an extra 0.05% interest, bringing the fixed rate to 2.54%.
In a sign that the bank expects interest rates to keep rising longer-term, CBA's 3-year fixed rate increased 0.15%, with borrowers now having to pay 3.14% interest. Add on another year and the 4-year fixed rate was bumped 0.25% to now stand at 3.34%.
RateCity's research director, Sally Tindall noted that with the latest round of increases, the bank's 3-year and longer fixed rates are now higher than they were before COVID struck.
In would could pose some difficulties for the Aussie housing market, Tindall added, "These fixed rates hikes aren't isolated to the big four banks. The rate rises are coming in across the board from lenders big and small and we expect them to continue."
The CBA share price closed flat yesterday.
CBA shares struggle amid price competition
Earlier in the week, The Motley Fool reported on the challenges facing CBA in recent months amid the past year's record low interest rates.
Joseph Koh, a portfolio manager in Schroders' Australian equities team, said both the Westpac Banking Corp (ASX: WBC) and CBA share price have been struggling as the banks are "more skewed towards residential mortgages relative to peers".
"Extremely low interest rates have buoyed mortgage growth, but have also led to sharp price competition, particularly hurting CBA's and Westpac's profitability," Koh said.
CBA share price snapshot
The CBA share price has been a strong performer in 2021, up 19%. By comparison, the ASX 200 has gained 10% year-to-date.
Over the past month, CBA shares have managed to notch up a 0.5% gain while the benchmark has retreated that same amount.
CBA pays a trailing dividend yield of 3.6%, fully franked.
