Commonwealth Bank shares have hit a record of $90 as expectations build for a Reserve Bank rate cut next week.
The largest company on the Australian share market briefly hit the milestone shortly after trade began on Friday, and settled as the session continued to close at $89.33.
It's a record price for the country's largest home lender, giving it a market value of about $144 billion.
Financial markets rate the chances of an interest rate cut next Tuesday at about 66 per cent, and overseas institutional investors are enticed by the prospect of a new record low cash rate, said Brian Johnson, a banking analyst with institutional stockbroking group CLSA.
"We're talking about interest rates falling and that's actually good for bank earnings," he told AAP.
"It makes Australian bank dividend yields, that are very high compared to banks around the world, look very good compared to the 10-year bond rate."
Dividend yields are the income shareholders receive each year, expressed as a percentage of the value of their shares.
Commonwealth's yield in 2014/15 was 4.5 per cent, much higher than a typical bank term deposit rate of three per cent.
"With deposit rates so low they've been forced to yield," Patersons Securities economist Tony Farnham said.
While Commonwealth has the highest share price of any local bank, Mr Johnson said all of the big four were popular with shareholders.
"It sounds like a very big emotional number but it's not out of whack with what we're seeing the rest of the banks do," he said.
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