Shares in Commonwealth Bank (CBA) are back to price levels last seen in late October 2007 when the Australian share market peaked at 6,792.10, some 32% higher than where the ASX200 index is today and that is, for obvious reasons, attracting quite some attention around family BBQs and elsewhere.
Long-term investors in the sector know the real news was already achieved in late 2011 because that's when CommBank shares had fully recovered all losses endured during the 2008 share market meltdown (as measured from the late 2007 peak). Two other banks, ANZ Bank (ANZ) and Westpac (WBC) – in that order of chronology – joined Commbank during the rally of 2012.
So far, National Australia Bank (NAB) has not managed to fully recover from its currency trading scandal at the beginning of the last decade, plus NAB is still carrying the scars from ill-advised expansions into the US and in the UK. It has made NAB over the past ten years the eternal laggard in the sector; always a smidgen cheaper than its three peers, but never been able to close the valuation gap on a sustainable basis. On the other hand, NAB has still outperformed Australia's regional lenders, Bank of Queensland (BOQ) and Bendigo and Adelaide Bank (BEN). So there's a clear ranking order inside the Australian banking sector and the GFC has simply reinforced the differences in risk profiles and quality franchises.