In afternoon trade, the Commonwealth Bank of Australia (ASX: CBA) share price is on course to end the month on a positive note.
At the time of writing, the shares of Australiaâs largest bank are up 0.5% to $98.22.
However, unless something spectacular happens between now and the market close, this wonât stop its shares from recording a disappointing monthly decline.
As things stand, the CBA share price is on track to post a 2.3% decline in March.
Why is the CBA share price under pressure this month?
Investors have been selling down the CBA share price this month due to concerns that rising interest rates were causing a global banking crisis.
This followed the collapse of Silicon Valley Bank and Signature Bank in the United States, as well as Credit Suisse in Europe.
It wasnât just CBA shares that came under pressure. The rest of the big four banks and particularly the regional players were sold off in March.
Bank of Queensland Ltd (ASX: BOQ) and Bendigo and Adelaide Bank Ltd (ASX: BEN) shares are down 8% and 10%, respectively, month to date. This appears to indicate that the market is far more concerned over their prospects than those of CBA.
Which should not be surprising at all given the strength of CBAâs capital position and liquidity.
As I mentioned here, CBA is arguably the safest ASX bank share thanks to its CET1 ratio of 11.4%, liquidity coverage ratio (LCR) of 131%, and net stable funding ratio (NSFR) of 129%. These are all significantly higher than requirements.
All in all, in light of this, it wouldnât be surprising to see the CBA share price rebound in April if banking crisis concerns ease and investors return to the sector.
The post Why did the CBA share price tumble in March? appeared first on The Motley Fool Australia.
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More reading
- ASX shares are paying out $19 billion in dividends this week. Are you getting a piece?
- Guess which ASX 200 bank stock UBS says is the most over-priced right now
- The biggest ever interim CBA dividend is being paid today. Here’s the latest
- ASX 200 bank stocks: ‘No different’ or ‘extremely strong’?
- Bendigo Bank shares worst of the ASX 200 banks following UBS downgrade
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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 Scott Phillips.
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