CBA broker flows continue to shrink

The Commonwealth Bank of Australia’s (CBA) full-year results for the period ended 30 June 2024 have revealed new mortgage business through the broker channel has dropped to 35 per cent, down from 39 per cent the year prior.

In comparison, CBA’s new business through the proprietary channel has increased to roughly 66 per cent, up from 61 per cent in the previous corresponding period (30 June 2023).

Of the $55 billion new CBA-branded mortgages (down from $60 billion the year prior), approximately $19.25 billion was lodged through the third-party channel.

These figures represent broker flows for CBA only and exclude its subsidiaries Bankwest and ASB. When looking at the group as a whole, broker flows decreased from 47 per cent to 46 per cent, with new business from the proprietary channel increasing to 54 per cent from 53 per cent.

The group’s full-year results revealed that its mortgage book grew by $12 billion year on year, from $584 billion to $596 billion (up by 2 per cent).

Owner-occupier loans accounted for 60 per cent of the group’s new business, down from 68 per cent the year prior, while investor loans increased from 32 per cent to 40 per cent, reflecting the boom in activity related to investor lending as reported by the Australian Bureau of Statistics (ABS).

The vast majority of CBA’s loans have shifted to variable rates (99 per cent), up from 95 per cent, as fixed-rate loans taken out during the pandemic continue to expire.

This follows the major bank making a deliberate shift towards focusing on the proprietary channel (announced during its 1Q24 financial results).

Additionally, CBA launched a direct-to-consumer refinance product, which offers borrowers a lower interest rate (when refinancing from another lending institution) than they would be able to access through the broker or proprietary channels.

However, this also comes as CBA aims to create Bankwest as its primary broker brand as the subsidiary undergoes a fully digital transformation.

The bank’s annual report said: “We can now offer two distinct banking options to support customers – a full‑service banking experience through CBA, and a simpler, digital, broker‑led experience through Bankwest.”

CBA boss Matt Comyn further told mainstream media that the broker channel is clearly “an important distribution channel and will remain so into perpetuity”.

Comyn said in CBA’s ASX announcement: “Our results demonstrate our continued focus on supporting our customers, our disciplined operational and strategic execution, and the strength of our balance sheet.”

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[RELATED: CBA launches direct-to-consumer refinance product]

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.