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CBA (ASX:CBA) shares hone in on NAB (ASX:NAB) shares

Commonwealth Bank of Australia (ASX: CBA)  shares are going back to the future. And let me explain why National Australia Bank Ltd (ASX: NAB) shares should keep an eye on this.
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Raymond Jang

Raymond is a Rask Investment Analyst. He has extensive experience in analysing and investigating businesses from his roles at a national accounting firm and at ASIC. Raymond is a Chartered Accountant and holds a Bachelor of Commerce from the University of NSW. His curiosity about the world and drive to find high-quality businesses is what gets him out of bed every morning. Outside of writing and investing, you will find Raymond playing football in a cage (trust us, it's more fun than it sounds) or at a park. If you enjoyed his analysis, check out our Rask services. You can connect with Raymond on Twitter or LinkedIn.
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Commonwealth Bank of Australia (ASX: CBA)  shares are going back to the future. And let me explain why National Australia Bank Ltd (ASX: NAB) shares should keep an eye on this.

CBA share price

Source: Rask Media 2-year CBA share price chart

NAB share price

Source: Rask Media NAB 2-year share price chart

CBA brings back invoice financing

As reported in the Australian Financial Review, CBA will release an invoice financing product developed through Waddle’s technology.

CBA has turned back time as it returns to the invoice financing market after a decade long hiatus.

It’s ready to take the fight to NAB and the other big banks.

The product, Stream Working Capital will offer financing in the range of 40% to 80% of the face value of invoices with mid to high single-digit interest rate charges. There is no establishment fee.

This product is aimed at businesses with revenue of up to $30 million and a minimum outstanding invoice balance of $50,000. It essentially assists businesses that run into short-term cash flow issues.

Small business lending remains the focus

CBA’s foray into the invoice financing market will amplify its push into the small business lending sector.

The big 4 bank has been able to leverage off Waddle’s technological expertise to eliminate the risk of fraud and enhance the efficiency of attaining loans for small businesses.

On top of this, Stream Working Capital will be integrated with Xero Limited (ASX: XRO).

Is CBA going back to a good future?

Given CBA recently sold off its general insurance arm and the continual exodus of wealth advisory clients, I think this is a sound strategic move.

As the great Warren Buffet said, “Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.”

It’s encouraging to see CBA partnering with fintech companies to optimise its product offering in a growing lending segment.

If I was an investor in any of the other big banks, I would keep a close eye on CBA’s tech developments.

CBA made a big all on interest rates yesterday, check out Jaz Harrison’s article to find out more.

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At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned

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