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The major bank’s broker head has responded, stating the lender “remains committed” to the broker channel.
Major banking group Commonwealth Bank of Australia (CBA) has responded to criticism from the industry regarding its statement in the quarterly report that it has focused on proprietary distribution.
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CBA general manager third-party banking Razia Khan told The Adviser that the broker channel remained an “integral part” of the major lender’s business.
She stated: “As Australia’s largest lender and with the highest volume of broker-originated loans we remain committed to this channel.
“Our priority is to provide all home loan customers with the best experience with CommBank as they realise their home ownership goals, regardless of the channel in which they come to us.”
Ms Khan, who took on the role as CBA’s permanent broker head in October, added: “We continue to make ongoing investments in technology to help empower brokers to achieve more for their clients through transformed digital experiences.
“Recent examples include the launch of Your Applications and enhancements to Your Loans, as well as our continued commitment to ongoing learning and development opportunities through our Broker Training Hub.
“In addition, we have made enhancements to our accreditation criteria to make it easier for brokers to become accredited with CommBank.”
Her comments came after in its quarterly results on Tuesday (14 November), CBA stated: “We have focused on proprietary distribution with new proprietary home loan fundings in the quarter broadly flat on the prior comparative period at $18 billion, while lower margin new broker fundings declined [by around] $5 billion over the same period.”
In light of CBA’s proprietary channel focus, Finance Brokers Association of Australia (FBAA) managing director Peter White claimed that the major lender had “turned its back” on the broking industry after “they’ve made huge profits off the back of mortgage brokers”.
Mr White stated: “Now the market starts to swing around it would appear that, from a CBA point of view, they’re going to dump brokers in favour of their proprietary channels ... they’ve used us to get what they want, now they’re going to throw us in the bin on the way through, which I find pretty distasteful, to be honest, given they’re always out there saying how much they support the broker marketplace.
“One of the issues that’s going to come from this is channel conflict. This is going to see a rise in channel conflict with CBA between their branches and brokers, especially if they start creating products that are only available through branch networks.
“There’s a whole host of challenges I see that this will bring, and unfairly so. It’s not like the bank hadn’t benefited from enormous support from the broker industry. And now they’re going to turn their backs on it? I just find that really distasteful.”
The revelation of the lender’s focus on proprietary channels followed CBA chief executive Matt Comyn’s comments in July that brokers remain a “really important part of support” for customers.*
*This story was updated on 16 November following an amendment to the July 2023 story
[Related: CBA has ‘turned its back’ on brokers: FBAA]
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