Insights

Is the CBA share price a buy following the bank’s digital mortgage launch?

Are CBA shares a buy today considering the bank’s new digital platforms?
The post Is the CBA share price a buy following the bank’s digital mortgage launch? appeared first on The Motley Fool Australia. –

It’s been a pretty wild week for the Commonwealth Bank of Australia (ASX: CBA). The CBA share price ended up closing at $104.60 on Friday, up 0.77% for the day after some big falls on Thursday.

Perhaps news of the bank’s new digital mortgage platform has been helping to boost investor sentiment this week.

Yes, on Tuesday, CBA’s management announced the launch of ‘Unloan’, a new digital platform designed to provide “one, simple, low-cost interest rate”.

In a company press release, CBA told Australians the following:

Owner-occupiers who refinance to Unloan will pay an interest rate of 2.14% (2.06% comparison rate) and investors 2.44% (2.36% comparison rate). Digital applications take as little as ten minutes and customers receive a loyalty discount that grows by 0.01% p.a. every year, up to 30 years.

Customers looking to refinance their properties up to a value of $3 million and up to 80% of their value can start applying now.

In addition, the bank also announced a new app called ‘Kit’. Kit will be a “money app and digital information tool for kids, aimed at helping them learn about money, how to save, how to budget, and how to manage their spending”. The app is currently in pilot.

So is the CBA share price a buy now?

With all of these new products on the way, could this make the CBA share price a buy?

Well, those are really two different questions. According to an article in The Australian this week, ASX brokers like what they see coming out of CBA. The article quotes analysts at broker and investment bank Macquarie as saying the following:

While CBA’s strategy may require additional investment, we see a large proportion of investment as the cost of staying in business and hence expect banks to maintain/increase their investment spend in the medium term… CBA should be able to reduce the cost of originating a mortgage and reduce customer churn by offering a loyalty discount.

However, that wasn’t enough to stop Macquarie analysts from maintaining an “underperform” rating on CBA shares. As we covered last week, Macquarie still has a $90 share price target on CBA shares for the next 12 months. The broker reckons CBA shares don’t warrant their premium valuation compared to the other ASX banks.

Another ASX broker in Goldman Sachs is also struggling to see value in CBA shares today. It has its own “sell” rating on CBA right now, with a 12-month share price target of $89.86 a share. Goldman’s concerns over CBA shares are similar, citing a premium valuation as the most pressing concern.

At the current CBA share price, this ASX 200 bank share has a market capitalisation of $175.18 billion, with a dividend yield of almost 3.6%.

The post Is the CBA share price a buy following the bank’s digital mortgage launch? appeared first on The Motley Fool Australia.

Should you invest $1,000 in CBA right now?

Before you consider CBA , you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and CBA wasn’t one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

More reading

Is QBE considered an ASX dividend share?
These were the worst performing ASX 200 shares last week
Here are the 3 most traded ASX 200 shares on Friday
Why is the Block share price leaping 9% on Friday?
The Zip share price is rocketing 6% today. Here’s why

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 positions in and has recommended Goldman Sachs. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Rebate Rewards

Level 2 Rebate

Deposit $2,000 and get $200 Rebate
$ 200 Rebate
  • 3 Simple Steps
  • 1. Register Using The Link Below (Promo-Code: WEBREBATE)
  • 2. Deposit $2,000 and place one trade at any non-Austalian market within 30 calendar days
  • 3. Receive Your $200 Rebate
Popular

Level 1 Rebate

Deposit $1,000 and get $100 Rebate
$ 100 Rebate
  • 3 Simple Steps
  • 1. Register Using The Link Below (Promo-Code: WEBREBATE)
  • 2. Deposit $1,000 and place one trade at any non-Austalian market within 30 calendar days
  • 3. Receive Your $100 Rebate

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex Securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

EASY QUALIFICATION & LOW ENTRY
NEW CLIENT REBATE OFFER
EARN UP TO $200 CASH REBATE
Act Fast - Promotion Ends In
Click Here To Get Started
EASY QUALIFICATION & LOW ENTRY
NEW CLIENT REBATE OFFER
EARN UP TO $200 CASH REBATE
Act Fast - Promotion Ends In
Click Here For More Info