Looking to buy CBA shares? Here's what you need to know

Despite a growing global and domestic push towards zero emissions, CBA is taking a more pragmatic approach to its financing intentions for fossil fuel projects.

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Key points
  • CBA shares are in the red today
  • CommBank reported it has no set end-date for financing oil and gas projects
  • APRA has removed the remaining $500 million capital add-on it applied to CommBank in 2018

Commonwealth Bank of Australia (ASX: CBA) shares are in the red today, down 1.1% to $92.06.

This comes amid a broader sell-off, following a big down day in US and global markets, which sees the S&P/ASX 200 Index (ASX: XJO) down 0.6% at this same time.

That's today's price action.

Now, here's the latest you should know if you're investing in CBA shares.

A woman wearing yellow smiles and drinks coffee while on laptop.

Image source: Getty Images

Oil and gas project financing remains on the cards

Despite a growing global and domestic push towards zero emissions, CBA is taking a more pragmatic approach to its financing intentions for fossil fuel projects.

Noting that it has 800,000 customers living in areas highly dependent on coal mining, the bank has flagged 2030 as the year it will cease financing thermal coal projects.

But speaking at yesterday's CBA climate briefing, chairman Paul O'Malley said there is no set date to end financing for new oil and gas projects.

Addressing the government's 43% emissions reduction target by 2030, O'Malley said (courtesy of The Australian): "Having a federally legislated target of 43%, my engagement with investors is we've now pivoted quite dramatically to how we deliver as distinct to whether or not we should deliver."

CEO Matt Comyn added: "We have a clear policy around oil and gas… The policy sets the boundaries, and then we make decisions during the course of the year within those boundaries."

Which isn't to say CBA shares won't be major backers of renewable energy sources.

According to O'Malley:

Storage capacity even between now and 2030 has to increase sixfold. Grid scale, solar and wind has to increase three times. For those projects to get up they need to access funding and CBA is absolutely wanting to be a lead lender to the increased renewables we need to support the grid.

CBA shares get APRA reprieve

In other news hitting the wires this morning, the Australian Prudential Regulation Authority (APRA) has removed the remaining $500 million capital add-on it applied to the bank following a range of governance and accountability failures.

APRA initially hit CommBank with a $1 billion capital add-on in May 2018. That was reduced to $500 million in November 2020.

The regulator says CBA has complied with the remediation program and addressed all the required recommendations.

The bank said that removing the remaining half of the capital add-on will see an increase of 0.15% to its Common Equity Tier 1 capital.

How have CBA shares been tracking?

CBA shares have modestly outperformed the benchmark in 2022, down 10% compared to a 14% loss posted by the ASX 200.

Motley Fool contributor Bernd Struben 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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