It seems many here don't understand how banks work. The...

It seems many here don't understand how banks work.

The fundamental equation of relevance is: Equity = Assets - Liabilities.

From the 2024 financials we see

Assets (which is mostly deposits) = $1254B
Liabilities (which is mostly loans) = $1180B
Resulting in Equity = $73B
The total debt issues from the 2024 financials was $144B which is 8% of total liabilities.

It is clear that a bank does not need to borrow money to make a loan (because actual debt is only 8% of liabilities).

Banks do, however, need to maintain a reserve which may be used in an emergency when there is a run of withdrawals. They are required to hold a reserve of 8% of their liabilities (loans). Interestingly 8% is exactly the same as the debt borrowings, so it seems that CBA borrows money cheaply overseas for an event that is extremely unlikely to happen - as any government is likely to save a bank in trouble.

When a bank issues a loan to a customer it instantly becomes an asset and before it goes anywhere it is a deposit and is therefore a liability as well.
Thus banks do not need to borrow money to make a loan. As can be seen above the issuance of a loan creates the deposit. If the loan money (deposit) finds it's way out of the bank it is likely to be balanced by other banks issuing loans that end up in the bank. The debt borrowings, above, are not and cannot be used to issue a loan.

The bottom line of the above diatribe is that the popular opinion that the banks carry huge debt is a misunderstanding. Liabilities, which some interpret as debt, are automatically created in equal amounts to assets when loans are issued. Don't confuse liabilities with debt.

Of course, none of the above is relevant to any discussion of whether a bank's share price is good, or poor, value.