The Commonwealth Bank (CBA) today confirmed its intention to reduce third-party commissions.
Kathy Cummings, CBA head of third party banking, said this morning that the combined pressures of the last eight months, as well as the bank’s commitment to remain a strong industry partner, had led it to review the profitability of its third-party business.
“The Commonwealth Bank is currently reviewing its broker remuneration model and the profitability of its mortgage line of business. As a result of this review we are in consultation with our key business partners and no decision has been made on the final broker remuneration model or timing of the introduction of any changes,” she told Mortgage Business.
The announcement follows Westpac’s recent decision to cut both upfront and trail commissions on third-party originated mortgages.
Earlier today CBA chief executive Ralph Norris told The Australian Financial Review that the bank was losing money “on every loan that goes through a broker.”
“It’s a case of when, not if,” he said, in reference to the commission cuts.
More analysis to follow as details are announced.
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