If you own Commonwealth Bank of Australia (ASX: CBA) shares, you're hardly alone. For many Australian investors, it's been a cornerstone holding for years, sometimes decades.
The question in 2026 isn't whether CBA is a great business. That part is largely settled. The real question is what to do next.
Do you hold, buy more, or finally take some money off the table?
Here's how I'm thinking about it.
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Why CBA still deserves respect
Commonwealth Bank of Australia remains the highest-quality bank in the country, in my view. Its scale, brand strength, and technology investment continue to set it apart from peers.
CBA consistently delivers superior returns on equity, benefits from a dominant position in Australian retail banking, and has been ahead of the curve when it comes to digital engagement. Its app is widely regarded as best-in-class, and that matters more than ever as banking becomes increasingly data-driven.
From an income perspective, CBA is also doing what long-term shareholders want. Dividends have been reliable, well-covered, and supported by strong capital levels. For investors who value stability and income, that still counts for a lot in 2026.
The valuation question is hard to ignore
This is where things get more nuanced.
CBA shares now trade on a meaningfully higher valuation than the other major banks. The market is effectively pricing it as a premium franchise with fewer risks, more stable earnings, and better long-term prospects. To an extent, that's fair.
But the higher the valuation goes, the less room there is for disappointment.
Earnings growth for Australian banks is likely to be modest in 2026. Credit growth is steady rather than spectacular, competition for deposits remains intense, and regulatory capital settings limit how aggressive banks can be. That doesn't mean CBA will struggle. It just means upside from here may be harder to come by.
At current levels, I don't think CBA looks cheap. It looks high quality and fully valued.
So what would I do in 2026?
If I already owned CBA shares, I would be very comfortable holding them.
This is not a business I'd rush to sell just because the valuation looks full. The combination of market leadership, dividend income, and defensive characteristics still makes it a strong long-term holding, particularly for conservative investors or those relying on income.
That said, if CBA had grown to an outsized position in my portfolio, I might at least consider trimming. Not because I think the business is deteriorating, but because risk management matters. Locking in some gains and reallocating to areas with better growth or valuation support can make sense.
Would I be buying aggressively at these levels? Probably not. I'd rather direct new money toward ASX shares trading on more modest multiples.
Foolish takeaway
CBA shares don't need to do anything special in 2026 to remain a good investment. The bank just needs to keep doing what it has always done well.
For me, that makes it a hold rather than a buy. A high-quality, low-stress core holding that continues to pay reliable income, even if the next leg of share price growth is slower than the last.
