CBA’s household deposits and home lending grew faster than the average for the banking sector in its first quarter.
The Commonwealth Bank of Australia (CBA) has grown home loans above the market average rate and continued to increase the share of proprietary-originated mortgages in the first quarter of the new financial year.
In a trading update for its first quarter ending in September, CBA grew home loans to $9.3 billion, 1.1 times above the system average for the three months.
According to the September quarter update, CBA’s home lending volumes increased 6.1 per cent year on year.
Proprietary home loans represented 68 per cent of new mortgage flows for the September quarter (excluding Bankwest and Residential Mortgage Group) – the highest proportion of the big four banks.
The dominance of the proprietary channel continues to increase at CBA, having grown 1 percentage point since the financial year ending June 2025 (FY25).
Indeed, in its full-year results – published in August – CBA revealed that its focus on proprietary mortgage lending had resulted in falling broker flows and a dominating proprietary channel. The share of new proprietary-originated home loans for the year ending June was 67 per cent (excluding Bankwest and ASB Bank), having grown from 65 per cent in FY24.
The shrinking share of broker-led mortgage lending comes as the major focuses on proprietary lending and after launching digital-only offerings with cheaper rates than those available through its branch network and the third-party channel.
CBA hailed “improved momentum” in volume growth across home lending and noted that home loan arrears decreased by around 4 basis points over the quarter to 0.66 per cent. It suggested the drop in arrears comes as “financial conditions have eased due to lower interest rates and inflation”.
Meanwhile, business lending volumes grew 10.4 per cent over the quarter, to be up by $2.6 billion.
The major pointed to a focus on growing its business banking franchise, with business transaction accounts up 7 per cent versus the prior comparative period to around 1.36 million accounts.
Business lending continued to grow across a mix of sectors, CBA said.
The trading update also shows that household deposits grew by $17.8 billion (up 9.5 per cent) in the quarter, 1.2 times faster than the average for the banking sector.
“We have maintained strong balance sheet settings,” CBA CEO Matt Comyn said on Tuesday (11 November).
“We remain conservatively positioned for the long term… Strong provision coverage has been maintained. Deposit funding now represents 79 per cent of total funding.
“Our long-term conservative approach allows us to support our customers, lend to productive parts of the economy to help the nation prosper, provide strength and stability for the broader Australian economy, invest for the future and consistently deliver for our shareholders.”
Majors focus on proprietary lending
As broker market share continues to hit new record highs, all four major banks have been focusing on growing proprietary flows.
Earlier this week, Australia and New Zealand Banking Group (ANZ) reiterated its focus on proprietary lending, despite the third-party channel continuing to write a record proportion of new mortgage business for the major bank.
Westpac last week revealed a push to grow proprietary lending to improve returns, while National Australia Bank (NAB) recently reported a 46 per cent increase in proprietary lending over the past two years.
The moves have drawn the ire of the broking industry, prompting the CEO of the Mortgage and Finance Association of Australia (MFAA), Anja Pannek, to voice her “disappointment” that channel conflict is once again “rearing its ugly head” in an open letter.
The MFAA CEO identified channel conflict as a major issue, reporting that members have detailed instances of “under-the-counter” branch pricing and loan applications being declined by a broker, but subsequently approved in-branch.
She stated that the practices raise concerns regarding potential lender bias in credit assessment, noting that they “undermine the foundation of our industry – trust”.
[Related: Share of proprietary loans grows at CBA, new AI partnership announced]
