The Commonwealth Bank of Australia (ASX: CBA) share price has gained 8.5% since this time last year.
In late afternoon trade on Friday, the S&P/ASX 200 Index (ASX: XJO) bank stock was trading for $104.37 a share.
Atop the sizeable gain in the CBA share price, the bank also paid out $4.20 in fully franked dividends over the 12 months. That equates to a trailing yield of 4%, with some potential tax benefits from those franking credits.
Image source: Getty Images
What tailwinds has the ASX 200 bank share been enjoying?
Like the other big banks, the CBA share price has benefited from rising interest rates, enabling it to increase its net interest margin (NIM). And profits.
At its half-year results, released on 15 February, CommBank reported an NIM of 2.10%. That was up 0.23% from the prior half-year. Management said the recovery in margins was due to the "rising rate environment, partly offset by competitive pricing pressure".
As for profits, CBA reported a 10% increase in its half-year statutory net profit after tax (NPAT), which came in at $5.22 billion. Management said the profit boost was "supported by growth in net interest income, partly offset by higher operating costs and loan impairment expense".
Despite this recent strength, the majority of analysts believe the CBA share price could come under selling pressure. Consensus has the big bank as a moderate sell rating, according to CommSec.
That's in part because these analysts expect CommBank to suffer a 0.15% fall in NIM. That's the biggest forecast decline among the ASX 200 banks.
But has the market got this one wrong?
Will the CBA share price prove the market wrong?
UBS head of banking research John Storey thinks the market is off on its assessment for CommBank's NIM in the year ahead.
As The Australian reports, he believes "rationality" for deposit funding costs is returning.
The competitive pricing pressure witnessed in the first half of 2023 softened "the benefit from a rising cash interest rate," he said.
Looking ahead, however, those headwinds may fade rather than pick up.
"Some of the expected NIM headwinds into 2H 23E/FY24E may well turn out to be better than forecast," Storey said.
As for the CBA share price, Storey said "the market has got it wrong". In fact, he said CommBank has "the most to benefit" as UBS' forecast rationality returns to deposits and mortgages.
UBS has a neutral rating on CBA shares, with a $100 price target.
