Commonwealth Bank to Cut More Jobs Amid Broader AI Push

The message is less about near-term earnings than about the durability of the bank’s funding franchise. A steady domestic macro backdrop typically lowers deposit beta pressure, supports loan growth mix toward mortgages and SMEs, and reduces the probability of an ugly credit-cycle surprise; that is particularly helpful for incumbents with low-cost transaction deposits and scale distribution. The second-order winner is the sector’s funding stability premium: when the market believes deposit stickiness persists, wholesale-funding-heavy lenders and smaller competitors lose relative appeal.

The more interesting angle is what this does to competitive behavior. If management sounds confident on the economy, the market often underprices the likelihood that incumbents keep defending share through pricing discipline rather than aggressive rate cuts; that can compress margins for challengers that need to buy growth. Over the next 3-12 months, the key swing factor is not headline macro optimism but whether credit losses stay benign once mortgage refi tailwinds fade and unemployment remains contained.

Contrarianly, this kind of benign commentary can be a late-cycle signal if it emboldens banks to stay lenient on underwriting just as the lagged effects of higher rates are still filtering through. The consensus may be too focused on “no recession” and too little on the slow erosion of consumer excess savings, which would show up first in arrears on discretionary unsecured lending and then in provisioning. That creates a skewed setup: upside if losses stay muted, but a sharp multiple reset if one or two quarters of credit normalization arrive faster than expected.

From a relative-value standpoint, the cleanest expression is to prefer the strongest deposit franchises over smaller lenders and non-bank credit providers that need more expensive funding. The trade should work over months, not days, because the market will wait for hard credit data; the key risk is that the optimism proves self-fulfilling and leaves little room for re-rating beyond current multiples. In that case, upside is capped, but downside is limited unless macro data deteriorate abruptly.