CBA share price: Rising interest rates are bad news for bank stocks

  • 📰 FinancialReview
  • ⏱ Reading Time:
  • 53 sec. here
  • 2 min. at publisher
  • 📊 Quality Score:
  • News: 24%
  • Publisher: 90%

Business News News

Business Business Latest News,Business Business Headlines

Another cash rate increase would do more damage to arrears than it would help net interest margins, according to Morgan Stanley.

Already a subscriber?A return to tightening by the Reserve Bank would penalise the major bank stocks and dent momentum in the mortgage market, negating the assumed benefit from improved lending profits from passing through a possible August cash rate increase.

Another RBA increase would be “bad for sentiment, making investors more cautious on the outlook and the major banks vulnerable to a de-rating,” said Morgan Stanley analyst Richard Wiles.In addition, further tightening would “slow momentum” in home lending, after the market has been showing signs of recovery. Figures released by the prudential regulator on Friday for mortgage lending in May showed growth increased to an annualised rate of 5.5 per cent, in line with household deposit growth.

“Westpac and CBA’s momentum in home lending continued in May, together accounting for over 50 per cent of net new mortgages in the month, with Westpac pushing most strongly into the owner-occupied segment, and CBA in investor ,” Mr Storey said. Treasurer Jim Chalmers said at the weekend he was “confident but not complacent” that the consumer price index could return to Treasury’s 2.75 per cent estimate by December this year. But thesays underlying inflation would not return to the 2 per cent to 3 per cent range until June next year.

 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.
We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 2. in BUSİNESS

Business Business Latest News, Business Business Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

CBA targets rivals as chase for business banking crown heats upWhile NAB is the big fish in business banking, Vacy-Lyle says CBA is also keen to cut Macquarie down to size, by sharpening its focus on the real estate market.
Source: brisbanetimes - 🏆 13. / 67 Read more »

CBA targets rivals as chase for business banking crown heats upWhile NAB is the big fish in business banking, Vacy-Lyle says CBA is also keen to cut Macquarie down to size, by sharpening its focus on the real estate market.
Source: smh - 🏆 6. / 80 Read more »

CBA targets rivals as chase for business banking crown heats upWhile NAB is the big fish in business banking, Vacy-Lyle says CBA is also keen to cut Macquarie down to size, by sharpening its focus on the real estate market.
Source: theage - 🏆 8. / 77 Read more »