Although it’s to CommBank’s ‘benefit’, credit growth might need to slow. (Source: Getty/Australian Parliament)
Commonwealth Bank CEO Matt Comyn – the country’s largest lender – has admitted credit growth in Australia might be running at a level that is not sustainable. For a banker, it’s not really something you necessarily expect them to say.
It comes as investors pile into the housing market and prices in most major cities continue to climb. But how long can it last?
“Housing credit [growth] at the moment – and I think this is perhaps worth a brief comment – is running at about 6 per cent, slightly higher for investors,” he said, before suggesting it would likely need to moderate.
“Obviously we benefit as an institution when housing credit is higher,” he noted.
“But for long term financial stability, for equality and access to the housing market, I think a slightly lower level of credit” would be preferred, Comyn suggested.
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“If I could speculate, I think that [level of growth] is probably pushing a higher level than perhaps policy makers and regulators might be comfortable with,” he continued.
“I’d say certainly our view would be that a more sustainable credit growth rate in housing would be slightly below the current level.”
The moment of candour from the Commbank boss came as he was taking questions from MPs in parliament on Tuesday as part of the House of Representative’s Economics Committee which is interrogating the chief executives of the country’s major banks over today and tomorrow.
According to the latest data released by the Australian Bureau of Statistics last week, the total number of new loan commitments for dwellings rose 6.4 per cent year-on-year in the September quarter 2025, with the value of those loans growing at nearly 10 per cent.
The recent rise in investor loans has increased expectations the prudential regulator APRA could step in to cool demand from property investors.
Overall, Comyn said the loss rates in mortgages have remained very low, largely due to unemployment being at very low levels for the past four years.
“So if there’s a change in unemployment that would make big differences,” he said.
For now, 85 per cent of the bank’s mortgage customers are ahead on their repayment, he added.
The bank boss also speculated whether there will be a “moderation” in housing demand now that further rate cuts are no longer predicted by much of the industry.
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Australia’s housing market is a constant source of national attention. (Source: Getty) · Getty Images
As part of Comyn’s opening remarks in the parliamentary proceedings, he also issued a bleak assessment of the global economy and Australia’s place in it, citing some of the macro challenges that continue to give bank executives “consternation”.
“There are some fundamentally different structural forces at play over the medium and long term.
“There is obviously the breakdown in trust between countries, the changes in terms of trade and geopolitical tensions, and I think we’re going to see that collide with a number of other structural forces,” he said.
Those forces included “the most significant changes in technology, certainly since the Industrial Revolution” such as increasing digitisation and artificial intelligence, the decarbonisation of the economy and demographic changes as more Aussies enter retirement.
“How all of these forces actually combine are giving us a lot of thought and also consternation,” Comyn said.
“That leads us to be very focused on, as an individual institution, and I think a sector, making sure there’s a lot of financial resilience, both in the Commonwealth Bank and in the banking system.”
His words of caution echoed that of the bank’s new chief economist Luke Yeaman who last month warned investors to “buckle up” as Australia entered a “new economic era” defined by geopolitical uncertainty.
Matt Comyn, CEO of Commonwealth Bank of Australia, speaking earlier this year. (Source: Reuters) · REUTERS / Reuters
The share price of Commonwealth Bank has fallen about 20 per cent from the highs in the middle of the year.
While the shine has come off the bank in the eyes of investors, the chief executive sought to counter a public perception that it was
“This view that banking is very concentrated, has very high barriers to entry and therefore super profits are being earned is a narrative we have done a poor job of countering and has been left unchallenged,” he said.
Comyn said the banks needed to generate a level of profitability in order to be viable in the current regulatory environment.
“One of the reasons profitability is so important versus profits is that banking is different in that we don’t just take deposits and make loans,” he said.
“Every time we make a loan we have capital set aside for expected and unexpected losses.
“There’s only two sources for that, either you have to generate profits as an institution or ask the shareholders or investors for the money.”
The Commbank boss said for every $500,000 loan, the bank will set aside $15,000, but if the person repaying the loan falls behind, the bank has to up that rate to more than $100,000.
Over today and tomorrow, MPs will haul leaders from the big four in for committee hearings ordered by Treasurer Jim Chalmers.
The House of Representatives Standing Committee on Economics will take aim at the major banks over interest rates, bank surcharge fees, scam protection, the closure of regional banks and the use of artificial intelligence.
It comes nearly seven years after the The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry handed down its report and recommendations.
with NCA Newswire
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