CBA scandal won't hit share price: Prescotts
Recent media coverage of the Commonwealth Bank's financial planning division will have no substantial impact on its share price or earnings, according to stockbroking and advisory firm Prescott Securities.
“The Commonwealth Bank recently received media coverage about their financial planning division but we
don’t think this will have a great impact on the share price or earnings,” Mr Adams said.
Prescott Securities is expecting a healthy result for CBA in the upcoming reporting season well above market expectations of three per cent cash earnings growth, he said.
Term deposits are at very low rates and look likely to fall further, reducing the bank’s financing costs, he added.
“Mortgage rates have generally remained steady, helping maintain interest margins,” Mr Adams said.
“The recent cut in fixed rate home loans indicates that there is some fat in net interest margins and that CBA may be using this to increase market share.”
Mr Adams said Prescott Securities expects earnings per share across the market to be around seven to eight per cent for the next reporting season.
“Much of this growth will come from the larger quality stocks, including the banks, healthcare and non-discretionary retailers,” he said.