Commonwealth Bank scrip is continuing to trade near a 12 month high despite copping a wave of downgrades from sell-side analysts in recent weeks.

Jefferies senior banking analyst Brian Johnson issued a note on 3 February warning clients that CBA’s operating earnings were set to take a hit in the next year after the bank decided to begin reporting regulatory and compliance expenses above the line.

The move prompted Johnson to lower his full year earnings forecasts and he now estimates the bank will report a lower-than-consensus first half profit on Wednesday.

Johnson acknowledges that CBA is generating faster credit growth than its peers but is concerned that this is not translating into revenue growth.

CBA’s share price underperformed other major banks on Monday after closing down 2 cents to A$88.61.

The other major banks each posted gains, led by Westpac (up 30 cents to $22.45).

Analysts at Goldman Sachs and Citi also downgraded CBA stock last week amid concern that the bank would struggle to meet the consensus interim profit forecast of $3.95 billion.

Goldman Sachs’ senior analyst Andrew Lyons is forecasting the bank will fall short of consensus by more than $250 million to $3.69 million.

Lyons believes the interim dividend is also set to come in 20 cents below the consensus view of $1.45.

He has lowered his recommendation on CBA scrip to a ‘sell’ with a 12 month price target of $65.49.

CBA reported a 2 per cent rise in underlying costs in the September quarter – a development that the bank attributed to higher investment spending and staff costs.

Lyons believes part of the wealth management operation is likely to deliver a rare boost to the first half bottom line, with life insurance income to quadruple to $131 million compared to the previous corresponding period.

While most analysts de-rated the stock last week, UBS’ Jonathon Mott did not adjust his near-term forecasts. He retains a ‘neutral’ stance on CBA.