The CBA share price has lost 15% so far in June. Is it worth banking on?

Has the bank's downturn created a buying opportunity? Some experts think so.

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Key points
  • The RBA's latest rate hike appears to have hit the CBA share price hard. The bank's stock has dropped 15% since the end of May
  • But not all are bearish on ASX banks in the aftermath. Clime Investment Management is reportedly snapping up bank stocks in the current environment
  • It reportedly believes Australians' high savings rate will protect the banking sector from the worst of the rate hike's impacts

This month so far has been tough for the Commonwealth Bank of Australia (ASX: CBA) share price.

The bank's stock has been dinted by a broader market stumble amid a 50 basis point rate hike announced by the Reserve Bank of Australia.

At the time of writing, the CBA share price is $88.13, 2.59% lower than its previous close. That's also more than 15% lower than it was at the end of May.

For context, the S&P/ASX 200 Index (ASX: XJO) has slumped 10.5% in that time.

But could the CBA share price's tumble have brought about a buying opportunity? Let's take a look.

Young woman using computer laptop with hand on chin thinking about question, pensive expression.

Image source: Getty Images

Is the CBA share price worth looking at?

The CBA share price has languished this month. And while that's likely upset those invested in the bank's shares, it could mean now is a good time to jump on board the ASX 200 giant.

Clime Investment Management Limited (ASX: CIW) chief investment officer Will Riggall reportedly said the fund is snapping up certain ASX bank stocks amid the downturn.

Rate increases give banks an opportunity to up their loan margins. But they also increase both the cost of living and the risk of a housing market downturn.

Such happenings could lower the quality of a bank's loan book and result in more defaults.

However, Riggall reportedly believes Australians' weighty savings accounts mean defaults won't increase so much as to offset the benefits of rising rates. The chief investment officer was quoted by the Australian Financial Review as saying:

[W]e will be selectively increasing our position in bank shares through this period of volatility as we see the high and sustainable dividend outlook as a key attraction in what is likely to be a lower-return environment.

It's a similar sentiment as that reportedly expressed by Citi earlier this week. The broker is said to believe banks have already factored higher interest rates into mortgages, creating a financial buffer.

This month's tumble included, the CBA share price is 14% lower than it was at the start of 2022. It has also slumped nearly 17% since this time last year.

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Brooke Cooper 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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