Commonwealth Bank of Australia (ASX: CBA) has a plan to win back market share in the wealth management department.
Commonwealth Bank of Australia or CBA is Australia’s largest bank, with commanding market share of the mortgages (24%), credit cards (27%) and personal lending markets. It has 16.1 million customers, 14.1 million are in Australia. It is entrenched in the Australian payments ecosystem and financial marketplace.
CBA’s New Fees
CBA subsidiary Colonial First State is going to cut fees for over 500,000 members with around $68 million in annual fee reductions across its superannuation and investment platforms.
The FY20 impact on net profit after tax (NPAT) is expected to be approximately $45 million.
Acting Executive General Manager Colonial First State Kelly Power said: “We know lowering fees will benefit member retirement saving outcomes and we’re aiming to make our platform and investments as cost effective as possible for them.”
The business will also be launching three new index funds to cater for rising demand with annual management fees of around 0.34% per year.
This seems like the right thing to do and probably should have been done quite a while ago. However, this alone does not change my lack of enthusiasm about investing in CBA shares due to the tough operating conditions.
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At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.