As two major banks announced their financial results this week, it’s a tale of two diverging share prices for Commonwealth Bank and National Australia Bank.
In the last six months to 13 February, Commonwealth Bank’s share price rose 13.6% while its rival NAB lost 3% over the same period.
Over a year to the same date, Commonwealth Bank rose 27.3% while NAB reported an increase of 15%.
NAB’s sharp downward trend began in November 2019 and was caused by the firm announcing it had experienced a 10.8% reduction on its cash earnings as a result of customer remediation and changes to its software.
In its first-half results this week, the firm announced a 1% increase in cash earnings but said it had pushed back the sale of its MLC Wealth business until after the current financial year as the business environment remained ‘challenging’.
While it remained trading at a far lower share price than Commonwealth Bank, the firm was managing to reverse the downward trend and its share price was up 6% since the start of 2020.
Meanwhile Commonwealth Bank beat expectations with its first-half results with $4.48 billion in cash profit, versus analyst expectations of $4.34 billion, although this was down 4.3% on last year’s figures.
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