ISCOVER
The proportion of broker-originated mortgages continues to fall at CBA, as it reveals a new partnership with OpenAI.
The Commonwealth Bank of Australia (CBA) has released its financial results for the full financial year ending June 2025 (FY25), revealing that its focus on proprietary mortgage lending has resulted in falling broker flows and a dominating proprietary channel.
According to its results, released on Wednesday (13 August), the share of new proprietary-originated home loans for CBA (excluding Bankwest and ASB Bank) was 67 per cent over FY25, growing from 65 per cent a year previously.
New mortgage flows at CBA were $67 billion for the year, up 22 per cent from $55 billion a year previously.
The yellow bank’s total balances in its home loan portfolio grew 4 per cent to $523 billion.
When including Bankwest, the proprietary flows for home loans made up 54 per cent of new business (the same as in FY24). In total, the banking group said it helped more than 140,000 households to buy a home.
Given the growing proprietary dominance, broker flows for new lending fell over the year to 33 per cent for CBA (but held firm at 46 per cent when including the ‘broker-led’ digital bank Bankwest).
CBA and Bankwest together secured $85 billion of new home loans during the year, a 23 per cent jump from $69 billion a year before.
The spot rate for total home loans at CBA and Bankwest together was $634 billion, growing 6 per cent year on year from $596 billion.
The major bank lent $42 billion to businesses to help them grow.
A focus on proprietary
CBA hailed its proprietary home lending growth, which it said accounted for around 52 per cent of total market proprietary share.
The shrinking share of broker-led mortgage lending at CBA, comes as the major has repeatedly highlighted its focus on proprietary lending and after launching new digital-only offerings that have cheaper rates than available through both the branch network and third-party channel, drawing criticisms from the industry for channel conflict.
However, CBA’s general manager of third-party banking, Baber Zaka, told The Adviser that the bank was committed to being the “premium lender of choice“ for the third-party channel.
“While our broker application numbers remain consistent, sustainably growing our flows is a top priority, and we’re continually evolving our offering based on broker feedback,“ Zaka said.
“Our recent enhancements that focus on offering flexible lending include a broadened construction loan policy, expanded rental income criteria to include broader income, and new servicing options for customers with HELP debt. We also continue to invest in technology, such as our Broker Portal, to assist brokers in providing their customers with a better experience,“ Zaka added.
“These updates will continue to support brokers in growing their businesses while enabling more Australians to achieve home ownership.“
Speaking on The Adviser’s In Focus podcast earlier this year, Zaka said the bank was actively working to increase broker flows and rebuild trust.
However, in its FY25 results, the major bank claimed that broker-originated home loans were around 20 to 30 per cent less profitable than those through the proprietary channel (based on average home loan returns from a $600,000 mortgage, adjusted for commissions).
CBA also noted it has been driving investments in the proprietary channel, revealing that the cost of additional resources required to support proprietary lending was a major factor for driving up total operating expenses to $5.1 billion, an increase of $217 million, or 4 per cent, on the prior year.
Inflation, amortisation, and higher investment and technology spend were also listed as major drivers.
CBA partners with OpenAI
CBA also announced a new push into more technology and artificial intelligence (AI) when announcing its full-year results.
Australia’s biggest bank has already been pushing into digital-focused mortgage lending, noting that around 96 per cent of home loan applications were settled digitally in FY25.
Digital loan documents were used for around 90 per cent of proprietary and broker mortgage flows.
CBA also revealed it has now formed a new, multi-year partnership with artificial intelligence juggernaut OpenAI (the parent company of ChatGPT).
The major bank has become OpenAI’s strategic banking partner in Australia.
As part of this arrangement, CommBank employees will progressively get access to OpenAI’s advanced AI tools, including its enterprise grade AI solution, ChatGPT Enterprise.
CommBank is also investing in comprehensive training and upskilling programs to increase AI capability and embed the responsible use of AI across its workforce.
Its tie-in with OpenAI will work to explore generative AI tech that aims to strengthen scam and fraud detection and deliver “more personalised services” for CommBank customers.
CBA did not specify if the new tech would have any impact on mortgage products or its home loan customers.
The bank has also expanded its partnership with US AI startup Anthropic, aiming to “strengthen AI adoption”.
CEO Matt Comyn commented: “To be globally competitive, Australia must embrace this new era of rapid technological change. Our strategic partnership with OpenAI reflects our commitment to bringing world-class capabilities to Australia, and exploring how AI can enhance customer experiences, better protect our customers, and unlock new opportunities for Australian businesses
“Equipping our people with the most advanced AI tools and capability is a key objective of this strategic partnership.
“We will continue to invest in our people and their AI proficiency so they can better support our customers, while building their skills and experience.”
“CommBank is one of Australia’s largest institutions, serving millions of people and businesses every day,” said Sam Altman, CEO of OpenAI. “We’re excited to work together to put advanced AI into the hands of more Australians, making it more useful and impactful for people and businesses across the country.”
Commenting on the bank’s financial performance, Comyn said: “This year we have continued to execute our strategic priorities, maintain strong operational performance and deliver consistently for our customers and shareholders.
“The operating context has been characterised by a rise in global macroeconomic uncertainty, increased geopolitical risk and continued domestic competitive intensity.”
Looking ahead, Comyn added: “We maintain prudent balance sheet settings over the long term so we can withstand uncertainty and volatility in the short term. Our strong financial position enables us to continue supporting our customers, investing for the future and delivering sustainable returns for our shareholders.”
[Related: CBA unpacks its broker strategy]
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