👉 Background: Commonwealth Bank is the Aussie bank with nearly 16 million customers. In fact, it’s not only Australia’s largest bank, but also the most valuable company on the ASX. So when CommBank releases its quarterly results, everyone’s ears prick up.

👉 What happened: In the March quarter, CommBank announced a $2.6 billion cash profit — and that’s a 6% rise on the previous quarter. While CommBank typically dominates the home loan sector, it’s also been picking up in the business banking space after it saw business loans grow by more than 9%... 1.3x the average growth of the other Big 4 banks.

👉 What else: CommBank's secret sauce is also in the highly-competitive and highly-lucrative home loan space. And, while most banks lean on mortgage brokers, CBA is focusing on growing its home loan book through its own channels.

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What's the key learning?

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💡While mortgage brokers bring volume, direct channels brings profit. In fact, mortgage brokers were responsible for nearly 75% of all new home loans in the September 2024 quarter. CommBank is bucking the trend... and making bank while doing it.

💡On the flip side, CommBank reported that 68% of its new mortgages came through its own proprietary channels over the past quarter - that’d be its own website and branches.

💡Mortgages that come directly from proprietary channels are much more profitable. In fact, broker-originated loans are reported to be around 20–30% less profitable according to CommBank’s financial results. That’s because of the upfront commissions and trail commissions given to brokers on every loan written. So CommBank's proprietary channels are creating a key differentiator in the market.