Commonwealth Bank (ASX:CBA) share price hits record high. Here’s why

The Commonwealth Bank of Australia (ASX: CBA) share price has hit a new multi-year high today as the company announces a new tech partnership. Shares in the bank are currently trading at $94.68, up 0.8% on Friday’s close.

As well as breaking through its previous 52-week high, the CBA share price is closing in on its all-time high of $96.17, achieved in late March 2015. 

Let’s take a look at what the banking giant announced.

Big tech partnership

The Commonwealth Bank has announced a partnership with major e-commerce operator Bigcommerce Holdings Inc, in what The Age today described as a move to attract younger, digitally savvy business banking customers.

BigCommerce is a US-listed company worth $3.34 billion. It provides a software-as-a-service (SaaS) e-commerce platform that helps target online shoppers, similar to that of rival Shopify Inc.

CBA says the partnership will provide the bank’s business customers with a platform that allows them to establish and grow their online presence. Anything from building a website and marketing campaigns through to payment solutions will be covered. It will also enable Commbank merchants to get paid faster through its same-day settlement.

According to The Age, CBA aims to use the platform to make inroads into the business banking sector. Traditionally Commonwealth’s major rival National Australia Bank Ltd (ASX: NAB) has been dominant in this sector and CBA is looking to change this.

Hunting for millennials

With the cohort of millennials set to grow by 17% over the next 10 years, Australia’s major bank is on the hunt for younger customers. It is widely held that millennials are generally more tech-savy than their older counterparts and, as such, a different style of marketing is required to attract them to a business.

Commonwealth Bank has been increasing its focus on attracting this demographic and, so far, this play appears to be bearing fruit. According to CBA, 57% of all its new bank customers over the last 6 months have been millennials.

Nonetheless, as stated by James Fowle, CBA’s business customer solutions executive general manager:

This is for businesses of all sizes, from a small startup selling things from your Instagram account all the way up to a large e-commerce player with multiple warehouses across Australia.

As such, this move is not just for the younger generation but all those that have transitioned to a stronger online presence during the COVID-19 pandemic.

About the CBA share price

The CBA share price has had a great year so far, gaining more than 13%. What’s more, investors holding the stock will receive a dividend yield of 3.3%, fully franked.

And with the bank yet to disclose its results this month, Citi analysts are expecting a jump in that amount. According to the analysts, Commonwealth Bank should pay a $3.45 dividend in FY21, meaning a 3.65% payout at today’s prices.

More reading

• ASX 200 Weekly Wrap: Bank shares push ASX 200 towards all-time high
• The big four banks and Macquarie offer these juicy dividend yields
• How the Commonwealth Bank (ASX:CBA) share price moved this week
• 4 reasons this broker thinks the NAB (ASX:NAB) share price is a buy
• IOOF (ASX:IFL) share price higher on transformational acquisition update

Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Shopify. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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