The Commonwealth Bank of Australia (ASX: CBA) share price couldn't avoid taking a hit during the March market turmoil.
But when the smoke cleared, shares in Australia's biggest bank stock did manage to lose less than the S&P/ASX 200 Index (ASX: XJO) over the month just past.
CBA closed out February trading at $156.74 a share. On 31 March, shares ended the day changing hands for $150.93 apiece.
This put the CBA share price down 3.7% in March.
That's slightly better than the 4.0% losses posted by the ASX 200 over this same period. And it doesn't include the dividend CBA paid out over the month, which we'll look at below.
Why did the CBA share price and the ASX 200 go backwards in March?
When looking at a single month's move for the CBA share price, or the benchmark index, it's worth taking a step back to look at the bigger picture.
If we take that step back, we'll see that both CBA and the ASX 200 were trading at all-time highs in February. So, some profit-taking wasn't entirely unexpected.
March also saw doubts arise over a potential end to Russia's war in Ukraine. And the month portended a likely end to the shaky truce between Israel and Hamas and Hezbollah.
Investors have also been gripped by uncertainties arising from the wave of tariffs unleashed by US President Donald Trump. Many of which are yet to be clearly spelled out.
The CBA share price also caught some added headwinds in March, with renewed focus on the bank's lofty valuations.
As we reported early in March, CommBank trades at an elevated price-to-earnings (P/E) ratio relative to its peers of just under 27 times. (That's now slipped to just under 26 times but remains well ahead of the other big four ASX 200 bank stocks.)
Matt Ingram, senior industry analyst at Bloomberg Intelligence noted that, "CBA is now vying for the title of world's most expensive developed market bank at levels it's been historically unable to sustain."
Digital advantage
The CBA share price could continue to trade at a premium to the other big banks amid CBA's outsized and ongoing investments in technology.
In March, Contact Asset Management noted:
CBA allocated over $800 million in 2024 to protect clients against fraud, scams, financial and cybercrime, with a further $450 million invested in the first half of FY2025.
CBA's consistent, disciplined capital management strategy and ongoing investment have driven growth and scale, leading to superior and sustainable shareholder returns over the long term.
Putting the dividend back in the CBA share price
As mentioned up top, March also saw CBA pay out a fully franked interim dividend of $2.25 a share.
CommBank stock traded ex-dividend on 19 March. If you owned shares on 18 March, you should have received that passive income payout on 28 March.
Now if we add that $2.25 back into the closing CBA share price on 31 March, then the accumulated value of shares bought in February comes to $153.18. Which brings the March retrace down to a lesser 2.3%.
