Why did the CBA share price lag the ASX 200 in April?

CBA shares underperformed the ASX 200 last month. What went wrong?

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Key points
  • Commonwealth Bank shares eked out a gain last month but still lost out to the ASX 200
  • A few things might have weighed on the CBA share price, including another bank scare and a rough day in court
  • Even so, there was some good news for CBA in April such as a possible acquisition of business lender ScotPac 

The month of April ended up being a pretty decent one for the S&P/ASX 200 Index (ASX: XJO) and ASX shares. Between 31 March and 30 April, the ASX 200 rose from 7,177.8 points to 7,309.2 points, a healthy rise of 1.8%. But let's talk about a major ASX 200 constituent – the Commonwealth Bank of Australia (ASX: CBA) share price.

CBA shares had a slightly different experience over April. This ASX 200 banking kingpin started last month out at $98.32 a share. But by the close of trade last Friday, the CBA share price had finished up at $99.36:

That's still a gain worth 1.06%. But it does mean that the CBA share price was a market lagger last month.

So what might have happened over April that caused investors to have such a lukewarm approach to the ASX 200's largest bank share?

Well, there wasn't any 'headline grabbing' news out from CBA itself last month. But we did see a number of events that could have influenced investors.

Young woman thinking with laptop open.

Image source: Getty Images

Why did the CBA share price lose to the ASX 200 in April?

Firstly, there was the sobering news that CBA's management was allegedly aware that the bank had been underpaying staff to the tune of $16.1 million since 2010. As we covered at the time, CBA admitted such in Federal Court. This could leave the door open to additional fines or disciplinary action. Hardly confidence-inspiring stuff.

Then towards the end of the month, ASX investors were greeted with the news that yet another international bank was in trouble. As we dove into on 26 April, First Republic Bank (NYSE: FRC) was unfortunate enough to have to go to its US investors with the news that US$105 billion had been drained from its books over the three months to 31 March 2023.

First Republic joins Silicon Valley Bank, Credit Suisse and Signature Bank in having significant issues in 2023 so far.

This news could have also been weighing on investors' minds.

It wasn't all bad news for the CBA share price over April, however. As my Fool colleague Monica reported last month, there were rumours flying around that CBA could be in the market for business lender ScotPac. If CBA did acquire this lender, it could result in up to $1 billion in loans the bank can add to its books.

Another positive development that CBA had in store for shareholders in April was the news that the maximum loan that the bank allows under its Green Loan program will increase from $20,000 to $30,000. The range of products that are eligible for this program is also scheduled to be expanded in mid-2023.

Foolish takeaway

It's probably a combination of all of these factors that led the CBA share price to post a market-trailing result over April. But still, a gain is a gain. So perhaps investors don't have too much to complain about. Let's now see what May has in store for the ASX 200's largest bank share.

 

Motley Fool contributor Sebastian Bowen 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 no position in any of the stocks mentioned. 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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