The Commonwealth Bank of Australia has announced a record-breaking half-year cash profit of $5.45 billion, marking a 6% increase from the previous year and surpassing market expectations. This financial milestone comes as investors aggressively enter the housing market, shifting dynamics away from owner-occupiers and first-time buyers.
Investor Dominance in the Property Market
Australia's largest lender revealed that it is settling over 3,000 housing loans on average each week, with property prices reaching or nearing record highs in many regions. According to CBA data, residential investment lending has surged, with investors now accounting for 43% of new business, up from 37% two years ago. In contrast, lending to owner-occupiers has decreased as a percentage of the bank's loan portfolio, highlighting a trend where investors with existing equity are outbidding first home buyers in a competitive market.
Financial Performance and Shareholder Returns
Following the earnings release, CBA shares soared by more than 7%, reflecting trader optimism about robust growth in both residential and business lending. The bank declared an interim dividend of $2.35, a 10-cent increase from last year. CEO Matt Comyn noted that home loan balances grew by 7% over the past year to $622 billion, with 97% of these customers also holding a CBA transaction account, underscoring the bank's integrated customer base.
Union Criticism Over Workloads and Automation
Despite the financial success, the Finance Sector Union has voiced strong criticism, citing rising workloads and increased automation as key concerns for employees. A union survey of over 1,700 CBA workers found that 72% are worried about job security, primarily due to offshoring and the rapid expansion of artificial intelligence. The union argues that while profits soar, staff face heightened pressures and uncertainty in their roles.
Mortgage Arrears and Economic Context
The bank reported a decrease in mortgage arrears as a percentage of its total loan book, attributed to last year's interest rate reductions and tax cuts that alleviated household financial strain. However, arrears levels remain elevated, and the full impact of recent rate hikes has yet to be felt. This situation highlights the delicate balance between profit growth and economic vulnerabilities in the housing sector.
National Trends and Regulatory Insights
CBA's investor lending surge mirrors a nationwide pattern, with investors receiving two in five home loans in the last quarter of 2025, totalling a record near-$43 billion according to the Australian Bureau of Statistics. This exceeded loans to existing owner-occupiers and nearly doubled those to first home buyers, despite government support schemes. Reserve Bank deputy governor Andrew Hauser acknowledged that lending growth exceeded expectations post-2025 rate cuts, noting that credit conditions remain accommodative despite recent rate increases.
New borrowing limits imposed by the prudential regulator, effective from 1 February, cap high debt-to-income loans at 20% of total new lending. Hauser praised this measure as a smart design to prevent unsustainable credit growth, emphasising the need for cautious lending practices in a buoyant market.
