Key points
- CommBank to release half year results on 9 February
- Net interest margin could fall below expectations
- Why analysts are watching Omicron's impact
- How Omicron is impacting CBA's Household Spending Intentions Index
Commonwealth Bank of Australia (ASX: CBA) looks to be caught up in the wider selling action hitting the S&P/ASX 200 Index (ASX: XJO) today.
CBA shares finished Friday's trading session down 1.26% while the ASX 200 slipped 2.27%.
That's today's price action.
Below we look at what's been happening with the big bank this week.
CBA shares in the news this week
Investors will be keeping a keen eye on CBA shares on 9 February. That's when the big bank reports its half year financial results.
With a lot riding on those results, analysts are offering their forecasts for ASX investors looking to get positioned early.
Among those is Morgans.
As my Foolish colleague James Mickleboro noted earlier today, the broker expects that CommBank won't reach market expectations. It has a reduce rating on CBA shares with a price target of $74. That's well below the current $97.53 per share.
Morgans believes CBA shares could come under pressure, as the broker expects its net interest margin (NIM) to come in at 1.86%. The consensus forecast is 1.91%.
Morgans is also keeping a close eye on how the Omicron variant could impact the bank's business, saying, "By way of outlook for asset quality, we will be particularly interested to hear about what CBA is seeing on the SME front with the spread of Omicron."
CommBank on Omicron
The CommBank Household Spending Intentions Index – which measures Aussie consumer spending – leapt by 2.5% in December. The gains were largely driven by big gains in the travel, transport and retail sectors when the Delta variant restrictions were wound back.
However, the rise of Omicron looks to be putting a dent in consumer spending.
According to CBA senior economist Belinda Allen:
The Omicron variant, which has led to a surge in COVID cases late in December and into January, is an important development to watch. It is impacting the demand and supply side of the Australian economy. We can see from our high frequency credit and debit card data there does appear to be a fall in spending in January, with spending on services more impacted than goods spending.
Lawsuit moves forward
CBA shares were in the national news again today, after the Finance Sector Union filed a suit in Federal Court. The union says that CommBank didn't allow approximately 3,000 retail staff to take their contractual 10-minute rest breaks, netting the bank some $45 million over the last 6 years.
A CBA spokesperson said the bank will carefully review the claim once it is served.
How have CBA shares been performing?
Despite the recent selling, CBA shares remain up 14% over the past 12 months. By comparison, the ASX 200 has gained 5% over that same time.
