Australia's largest bank delivers solid first quarter, but margin pressure remains
Commonwealth Bank grew its home loan book by $9.3 billion in the September 2025 quarter, equating to 1.1-times system growth.
Year-on-year, CBA’s home lending portfolio expanded by 6.1%, demonstrating continued momentum despite rising competitive pressures across the mortgage market.
CBA’s proprietary channels accounted for 68% of new home loan flows during the quarter (excluding subsidiaries Excludes Bankwest and Residential Mortgage Group), signalling a tightening grip by the major bank on direct distribution.
In its 2025 financial year, CBA reported that broker-originated loans comprised 34% of new flows for the quarter – that has now reduced to 32%, the lowest among the Big Four by a wide margin.
Speaking of margins, while lending volumes increased, CBA’s headline net interest margin (NIM) was squeezed due to a portfolio mix shift.
The bank boosted its holdings in lower-yielding liquid assets (up $12 billion) and institutional repos (up $5 billion), dragging on overall margin performance.
Excluding these effects, underlying NIM still edged lower, reflecting customer switching to higher-rate deposit products and heightened pricing competition, especially in the mortgage space.
“Many Australians have found the past four years challenging, particularly dealing with cost-of-living pressures,” said Comyn in the results announcement. “Households and businesses have felt some relief recently from lower interest rates. However, cost pressures remain and global issues continue to create uncertainty.”
He continued: “We recognise cost-of-living pressures remain a challenge for many. Despite escalating geopolitical and macroeconomic uncertainty, we are optimistic on the outlook for the country.
“We are closely watching the increased competitive intensity and implications across the financial system, and we will continue to adjust our settings as appropriate.
“The Australian economy remains resilient. Economic growth is recovering and disposable income is rising for many households. We remain focused on our strategy to build a brighter future for all.”
CBA head of broker backs third party channel
While broker-orginated lending being squeezed at CBA, the banking giant's general manager third party banking Baber Zaka has reiterated CBA's commitment to the broker channel.
Speaking to MPA yesterday, Zaka said: “Mortgage brokers are at the heart of helping Australians into homes, and they remain central to our lending strategy.
"We’re focused on growing our flows sustainably, by listening to our brokers and adapting our services to meet their needs. This year we’ve updated our HELP debt, construction loan and rental income policies to give brokers greater flexibility and help more customers realise their home ownership goals.
“We’ve also strengthened our broker support through a refreshed tiering system, expanded sales capability, and implementing a national sales lead. Our focus is on long-term support, backed by better technology and processes to make it easier for brokers to do business with us.”
