Shares in The Commonwealth Bank soared 59c yesterday and with
the stock up another 17c to an unprecedented $44.04 this morning, it appears to
have set a record for market capitalisation of an Australian bank
whilst extending its valuation lead over the National Australia Bank to
more than $4 billion.

As you read this, CBA is capitalised at a staggering $56.75 billion,
$4.5 billion clear of NAB which has dipped 5c to $32.41 this morning
and is capitalised at $52.25 billion.

The CBA valuation today appears to be an all-time record for an
Australian bank, because when NAB hits its record high of about $36.50
in mid 2002, its market valuation peaked at about $56 billion. Back
then CBA was only worth about $44 billion, so we’ve seen a $16 billion
turnaround in the relative valuation of our two biggest banks over the
past three and a half years.

Like CBA, ANZ and Westpac both hit record highs yesterday and with ANZ
capitalised at $44.7 billion and Westpac $42.5 billion, the Big Four
are now worth a record $196.2 billion. It won’t be long before the
magical $200 billion figure is reached and all of this comes from
gouging the bejeezers out of Australian consumers.

CBA first briefly took the biggest bank title in 2004, but it was $2
billion behind NAB as recently as last September. So the departure of long-serving CEO
David Murray has certainly not held back the bank, which was privatised
in 3 tranches during the 1990s for just $8 billion.

All of this will provide plenty of food for thought at the NAB AGM in
Sydney on 30 January. My annual report and notice of meeting showed up
this morning and the cover is emblazoned with “New Thinking New

So exactly how are they going to reclaim the mantle of Australia’s
biggest bank? The rise of the CBA, combined with the fact that NAB has
relocated is forex trading operations to Sydney, once again
demonstrates how Sin City is the clear financial capital of Australia,
whilst Melbourne’s manufacturing heartland continues to shrink, Kraft’s
closure of its biscuit factory in Broadmeadows being the latest example.