Why Macquarie, ANZ and CBA Share Prices Are Down Today

At time of writing, the share prices of Macquarie Group Ltd [ASX:MQG], Australia and New Zealand Banking Group Ltd [ASX:ANZ] and Commonwealth Bank of Australia [ASX:CBA] are all down.

While Macquarie and ANZ are trading ex-dividend, the share price of CBA was down on the revelation that its third quarter profit fell 28% to $1.7 billion in the three months to March.

Shares typically trade lower on the ex-dividend date as investors price in the income missing from the dividend that shareholders are not entitled to following this date.

CBA share price lower as company details remediation

The CBA share price is down 2.72% at time of writing, with the company providing details on its $714 million in remediation — mainly for the actions of its wealth division.

It noted that the total remediation bill has now reached $2.17 billion when factoring in compensation payments and administration costs.

There was some good news for the company though, with a 2.3% increase in business credit, a 2.8% increase in household deposits and 2.5% growth in its mortgage book.

There was an uptick in customers falling behind on their mortgage payments by three months or more — up to 0.71% from 0.67%.

It also noted that 3% of its mortgage customers were in ‘negative equity’ — a situation that arises when the outstanding balance of a home loan exceeds the value of the house.

What’s the outlook for the CBA share price?

As you can see in the chart below, the CBA share price has been on a run since the conclusion of the Banking Royal Commission:

CBA share price

Source: tradingview.com

It’s had rising bottoms until it hit resistance in the $75–76 range.

The ongoing downturn in the housing market could impact its earnings going forward.

CEO Matt Comyn discussed today’s announcement saying:

While headline profitability was impacted by higher remediation provisions, our sound business fundamentals ensure we remain well-placed in a challenging environment, highlighted in this quarter by volume growth in our core businesses, a strong capital position and continued balance sheet strength.

I personally expect CBA’s share price performance to be middling over the next few months. Meaning, it’s not going to go flying through the roof or crash through the floor.

It’s got a hefty dividend, but the downside risks of the housing market reduce its appeal.

Instead of owning CBA, it may be better to take a peek at our ‘Top Five Dividend Stocks for 2019.’

The free report details five stocks that could be poised for an excellent year.

Regards,

Lachlann Tierney,
For Money Morning


Lachlann Tierney is a writer for Money Morning and has been investing for nearly a decade. With an MSc from the London School of Economics, he brings a sound understanding of global markets to his writing. Lachlann is interested in emerging technologies, energy solutions and helping people invest their money wisely. Recently, he has been working with Phil Anderson and Terence Duffy. They have three publications:

Phil Anderson’s Time Trader
Cycles, Trends & Forecasts
Money Morning Trader


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