Read more about our view of CBA shares. 

Nathan Zaia: Yeah, pretty good result overall. I mean, we knew margins would come under a little bit of pressure. We've got people switching from really cheap savings accounts into higher-paying term deposits and online savings accounts. And there's just general competition on that to raise those term deposits. So that's been an ongoing headwind for the banks. Still a little bit of margin pressure from competition in mortgages. Some signs that's easing. But I think that was probably the biggest headwind for the bank in the half. You've got operating expenses still rising and not unexpectedly given inflation, but pleasingly bad debt still remained very low. And so that's a bit of an offset and helping hand to profits. Balance sheet is still very strong. The payout ratio of 70%, 80% has been maintained. So, we're forecasting dividends for the full year increase a couple of percent to $4.60. So overall, we think a good result and the bank still in a very strong position. 

Loss of home loan market share has been the one concern. And I think this result kind of vindicates what the bank has been doing in terms of trying to manage margin. If they just chased growth and were as aggressive as everyone else, probably would have meant others had to undercut CBA and you just continue to drive down margins across the industry. So, I think they've balanced that pretty well.

We have a $90 valuation on the bank. It's obviously trading a lot higher. So, we think the valuation is a bit stretched at the moment. If you look at P/E, dividend yield, it does look expensive and probably doesn't take much in terms of an earnings miss for people to question why am I paying 19, 20 times for this bank as good as it is. I mean, we're assuming the bank can grow market share in the next five years. That's a turnaround from what's happening now. We think margins improve over the next five years. Again, the trajectory at the moment is negative. We think operating expenses only rise 2% to 3% per annum, again, lower than what they've been doing now. So, we think we're pretty optimistic on most things that go into our valuation on CBA. There we still come in well below the current share price.

Yeah, I think the main thing is there are pressure on households and businesses. We're seeing discretionary spend pullback and the bank can see that in their own customers' transaction activity, some dipping into their savings balances as well. But if you step back and look as a whole, bad debts are still very low. I mean, if we take their current loan balance and what typically they would average in terms of loan losses, you're looking at about $1.4 billion in bad debts. If we take what they did in the half and annualize that, it's about $800 million. So, they're still well below that. We are seeing arrears, so people falling behind on their mortgages, start to rise. But that's to be expected. And put it into context, we're still below pre-COVID levels. So strong unemployment, strong house prices, it's really helping a lot of households get ahead and stay afloat, really.