CBA’s business lending outpaces home loan growth

The Commonwealth Bank of Australia’s (CBA) third quarter trading update for the period ended 31 March 2023 (3Q24) has revealed home lending growth of $4.2 billion, up 3.1 per cent on the previous quarter.

However, business lending for the major bank outpaced its home loan growth, up $2.7 billion (7.3 per cent) on the December quarter 2023, 1.1 times at system, while home lending grew 0.7 times at system.

The trading update has also shown a decline in the pace of growth for home loans year on year, with home lending down from $6.9 billion (5.2 per cent) in the March quarter of 2023.

Despite this, according to the latest authorised deposit-taking institution (ADI) statistics for March 2024 released by the Australian Prudential and Regulation Authority (APRA), CBA maintained its lead in the mortgage market share, with its total mortgage book increasing by $1.9 billion to $549 billion.

The major bank’s total loan book grew by 1.8 per cent year on year on the heels of a decline in new mortgage lending last year amid elevated home lending competition.

Furthermore, the proprietary mix for home loans represented 65 per cent of new business flows for the March quarter, while around 35 per cent were originated through the third-party channel (flows for CBA only, excluding Bankwest and Residential Mortgage Group).

This has revealed a slight rise in broker-originated loans from the previous quarter, up from 33 per cent, which was the lowest proportion of broker-originated loans in recent years.

In addition, CBA reported loan impairment expenses of $191 million as portfolio credit quality “remained sound, with moderate increases in bother consumer arrears and corporate troublesome exposures”.

Indeed, mortgage arrears increased during the March quarter up to 0.61 per cent from 0.52 per cent in the previous quarter.

Commenting on the trading update, CBA’s chief executive Matt Comyn said the major bank has “continued to focus on supporting our customers and communities, investing for the future and providing strength and stability for the broader economy”.

“We know that many Australians are feeling under pressure due to a higher cost of living and we are here to support those customers that need our help,” Comyn said.

“The fundamentals of the Australian economy remain sound. Unemployment remains low, supported by business and government investment and elevated terms of trade.

“We recognise that all households are feeling the impact of higher inflation and higher rates, however immigration is providing a structural tailwind for the economy.”

[RELATED: CBA’s loan flow contraction continues]

Adrian Suljanovic is a journalist at Broker Daily with more than two years experience reporting on all facets of the third party distribution channel.

Adrian has written for a range of business and finance titles including IFA, Investor Daily and Lawyer’s Weekly before joining the mortgages team in 2022.

He graduated from the University of Wollongong in 2021 gaining a Bachelor of Communication & Media with a major in Digital & Social Media.

E-mail Adrian at: This email address is being protected from spambots. You need JavaScript enabled to view it.