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The Commonwealth Bank of Australia (CBA) has reported a decline in broker-originated loans for the first half of FY2024–25 (1H25), as detailed in its latest financial results.
The major bank revealed that broker-originated loans dropped to 34 per cent of its new mortgage flows, down from 35 per cent in the previous six-month period ending June 2024.
However, this was up from 33 per cent in the same period of FY23–24.
Meanwhile, CBA’s direct channel accounted for 66 per cent of new mortgage business during the six months to December 2024, marking a small increase from 65 per cent in June 2024 but a slight decline from 67 per cent a year prior.
This shift saw $44.9 billion of the $68 billion in new CBA-branded mortgages originate through direct channels, up from $35.8 billion in the previous six-month period.
CBA maintained a dominant spot in the proprietary loan market, holding more than 45 per cent of the total market share for proprietary flows.
When including its subsidiary Bankwest, broker-originated loans accounted for 46 per cent of new mortgage flows, unchanged from the previous six months but a rise from 43 per cent in the same period the previous year.
Despite the continued growth in broker-written home loans and brokers holding almost 75 per cent of the home loan market share, CBA’s financial results report noted that broker-originated loans are around “20–30 per cent less profitable than proprietary”.
According to CBA, broker returns are “adjusted for upfront and trail commissions and lower operating expenses”.
CBA has made no secrets about its shift towards focusing on proprietary distribution for its home loans after it saw home loan values drop over the three months to 30 September 2023.
However, despite the apparent shift, CBA CEO Matt Comyn confirmed that the broker channel is clearly “an important distribution channel and will remain so into perpetuity” following the release of its financial results for the period ending 30 June 2024.
This push for direct business is reflected in the bank’s overall loan book, with broker-originated loans continuing to decline, dropping 1 percentage point to 38 per cent in 1H25.
On the 1H25 results, Comyn stated: “During the half, we continued to focus on supporting our customers, investing to protect the community and providing strength and stability for the broader economy.
“Every day we lend to more than 200 businesses, help almost 400 households buy a home, process more than 20 million payments and send customers 18,000 alerts about suspicious account activity.
“We’ve invested more than $450 million to combat fraud and scams, and financial and cyber crime. Our continued investment has reduced customer fraud and scam losses by more than 70 per cent over the past two years.”
[RELATED: CBA broker flows continue to shrink]
