Could CBA be about to add $1 billion to its loan book?

What's happening at CBA?

Key points
  • CBA shares are rising today 
  • Media reports suggest CBA could be considering acquiring a business lending company that has a loan book of about $1 billion 
  • Westpac, ANZ and NAB shares are also lifting today 

Commonwealth Bank of Australia (ASX: CBA) shares are in the green today.

The bank's shares are rising 1.4% at the time of writing and currently fetching $100.76. For perspective, the S&P/ASX 200 Index (ASX: XJO) is down 0.0041% at the time of writing.

Let's take a look at what is happening at CBA.

A male investor sits at his desk pondering at his laptop screen with a piece of paper in his hand.

Image source: Getty Images

What's going on?

CBA is not the only ASX 200 bank share rising today. Westpac Banking Corporation (ASX: WBC) shares are jumping 1.37%, while National Australia Bank Ltd (ASX: NAB) shares are leaping 1.66%. ANZ Group Holdings Ltd (ASX: ANZ) shares are also lifting 1.16%.

News has emerged that Commonwealth Bank could be weighing up acquiring business lender ScotPac. ScotPac's loan book was worth nearly $1 billion a year ago, a source cited by the Australian said. However, another source said CBA could potentially build its own such business without an acquisition.

The publication noted CBA has hired advisory company Gresham and is carrying out "due diligence" on ScotPac, which is owned by Affinity Equity Partners.

This follows sources telling the Australian Financial Review a big bank was looking into ScotPac in August last year, with CBA the most likely candidate.

Most of CBA's profit comes from lending. As my Foolish colleague Tristan noted recently, the bank received $11.6 billion worth of net interest income in the first half of FY23.

Meanwhile, CBA has today announced a broadening of its Green Loan program to include more funding and products. This may help more customers buy electric and hybrid vehicles.

The green loan is a 10-year fixed-rate loan at 1.99% per annum with no monthly loan fees. CBA is boosting the maximum loan size from $20K to $30K and widening the number of products eligible.

Commenting on the news, CBA retail banking group executive Angus Sullivan said:

The expansion of eligible products will ensure customers can use the loan for items such as double-glazed windows and to switch their homes from gas to electric cooking equipment – building on the clean energy products already eligible, including solar and battery, solar hot water systems, heat pump hot water systems and electric vehicle charging stations.

CBA share price snapshot

The CBA share price has descended 6% in the last year.

CBA has a market cap of about $170 billion based on the current share price.

Motley Fool contributor Monica O'Shea has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Westpac Banking. 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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