Australia’s largest listed company, Commonwealth Bank of Australia [ASX:CBA], experienced a share price jump of 1.44% this morning.
By far the biggest and most overarching of the banks, CBA’s market cap sits pretty at $128.12 billion, with a staggering 16.6 million customers in 2017.
Another CBA outage
This wasn’t necessarily a shock. The multinational often sees online outages causing nationwide angst. Yesterday, CBA’s 6.2 million online customers were severely inconvenienced when their money became frozen or non-existent online. Issues ranged from being declined at McDonald’s to having full credit histories wiped.
As you can imagine, angry CBA customers took to their social media accounts to blast the business, as reported by news.com.au:
‘I just had my credit card and key card declined at the supermarket and was left standing there with $300 worth of groceries that I couldn’t pay for.’
Despite the 25-hour disgrace, and millions of unsatisfied customers, CBA’s share price climbed today. Initially the market opened with a noteworthy dip, potentially related to the outage. But from there it bounced quickly, and has since moved sideways all day.
At time of writing the stock is up 1.44% for the day.
What’s next for our country’s largest taxpayer?
With an apologetic statement, the nation’s biggest bank has restored its trusted position, as reflected in their share price value.
However, this position may be altered once again as a Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry is underway. The commission was established in late 2017 in an effort to cease misconduct happening at all four major Australian banks.
CBA’s unrivalled spot at the top of the banking food chain may be affected by this investigation, as they have already been slammed for their lack of honest disclosure back on 18 March.
As reported by The Sydney Morning Herald:
‘CBA and 40 other financial institutions were asked to hand up a 50-page submission on all examples of misconduct or conduct falling below community standards in their businesses over the past 10 years. However, some banks were asked to resubmit after they produced documents that were light on detail.’
We can’t predict the outcome of the Commission, or the markets for that matter. But we can assume this will influence CBA’s share price value over the coming months.
For Markets & Money
PS: Australia’s economy is massively dependent on the banks. They make up a huge portion of our share market, and hold enough housing debt to have a disastrous effect, should anything happen to them. If you’re concerned about the potential for the big four banks’ woes to trigger a financial crisis in 2018, you should read Markets & Money editor Vern Gowdie’s free report ‘Global Financial Crisis 2018’. You can download that report free here.