How brokers made the ultimate wrong call on CBA

CBA's share price has plunged by more than 10% since the start of the year, making it one of the worst performers on the ASX 200.

Brokers had been expecting a strong set of results from CBA, but the bank surprised the market with a sharp decline in its net interest margin (NIM).

NIM is the difference between the interest rate that banks charge customers for loans and the interest rate that they pay depositors.

It is a key measure of a bank's profitability, and a decline in NIM can put pressure on earnings.

CBA's NIM fell by 10 basis points in the first half of the year, to 2%. This was due to a number of factors, including the impact of the Reserve Bank of Australia's (RBA) interest rate cuts and the bank's decision to hold more low-yielding assets.

The decline in CBA's NIM was worse than brokers had expected, and it has led to a sharp downgrade in earnings forecasts.

As a result, CBA's share price has fallen by more than 10% since the start of the year.

Here are some of the reasons why brokers made the wrong call on CBA:

• They underestimated the impact of the RBA's interest rate cuts on CBA's NIM.
• They did not expect CBA to hold more low-yielding assets.
• They did not factor in the impact of the global economic slowdown on CBA's earnings.

The decline in CBA's share price is a reminder that even the most experienced brokers can make mistakes.

It is important to do your own research and to consult with a financial advisor before making any investment decisions.